Digital freight broker Transfix has announced it will remain a private company. It has terminated a business combination agreement with G Squared Ascend I, ending a planned initial public offering.
In June, the public listing was pushed back to November due to deteriorating public market conditions.
A public listing through a special purpose acquisition company combination was expected to fetch an enterprise value of as much as $1.1 billion. As broader stock markets have rolled over, interest in public listings, including SPACs, has faded.
The MerQube FreightWaves Supply Chain Tech Index, which measures the share price performance of tech-enabled supply chain services providers, has fallen 20% since mid-August and is down 31% year to date. In comparison, the S&P 500 is off 25% so far this year.
A separate announcement said G Squared and New Enterprise Associates (NEA), which is also currently an investor in Transfix, will lead a private round of funding to back Transfix’s growth initiatives and technology solutions. Larry Aschebrook, G Squared founder and managing partner, will join Transfix’s board.
“We have fostered a strong partnership with G Squared and NEA, who continue to believe in our business and the opportunity ahead,” Lily Shen, Transfix CEO and president, stated in the news release. “This funding will allow us to continue investing in our technology and innovation, advancing Transfix’s modern solutions for shippers and carriers, and delivering on the access, ease, and reliability the industry deserves.”
When the merger extension was announced in June, a statement said Transfix would receive $50 million in guaranteed financing from G Squared by Sept. 30 as part of a forward purchase agreement. An additional $50 million in committed capital from G Squared was also announced even if the merger didn’t occur.
Transfix also announced Tuesday it would streamline operations, with the core focus remaining “sustained, profitable growth.”
“We strive every day to be adaptable and resilient in everything we do, and with every decision we make. These adjustments — while difficult — are required to meet and exceed the current and future needs of the freight industry,” the company’s blog post read.
A representative from Transfix was not available to elaborate further on the planned operational changes.
“Transfix’s team of freight industry and technology experts continues to raise the bar across the sector as they work to move goods more seamlessly and sustainably,” Aschebrook said. “G Squared is confident in Transfix and its prospects and will continue to support Transfix as a private company.”
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