A market regaining its footing
The data tells a clear story: SPAC IPO activity rebounded meaningfully in 2025.
After averaging roughly 7 to 8 SPAC IPOs per month in 2024, the market picked up to approximately 10 to 11 per month in 2025. When we recorded the video above, 133 new SPAC IPOs had closed — roughly double the total in 2024. Even more notable, the aggregate value of funds raised tripled year over year, signaling not just more deals, but larger ones.
SPACs now account for approximately 38% of the overall IPO market, a significant share by any measure.
On the de-SPAC side, activity has been more muted, with about 40 transactions completed as of early December, down from 73 in 2024. But context matters. Fewer SPAC IPOs in prior years naturally mean fewer vehicles reaching the de-SPAC stage today. Importantly, more than 100 business combinations have been announced, suggesting a healthy pipeline in 2026.
A healthier supply-and-demand balance
One of the most notable shifts in 2025 has been a better balance between SPACs and available targets.
Ellenoff estimated that the universe of private companies interested in going public via a SPAC exceeds the 200 mark. With fewer than 200 active SPACs in the market, sponsors are no longer fighting over the same limited pool of targets, a dynamic that contributed to poor outcomes in 2021.
Sponsors are also benefiting from broader macro conditions. Many private equity and venture-backed companies are well past their expected sell-by dates and are actively seeking liquidity. That reality has made it meaningfully easier for SPAC sponsors to identify viable targets and engage in constructive negotiations.
More first-time sponsors enter the market
Another notable trend we observed towards the end of the year is the rise of non-serial, first-time SPAC sponsors. While a relatively small group of investment banks continues to dominate issuance, the sponsor base is expanding.
This trend is a positive sign of market normalization. However, Ellenoff cautioned that it's important to watch how these first-time sponsors perform. Serial sponsors with established pipelines and experience navigating complex SPAC transactions naturally enjoy certain advantages, including better deal economics and stronger investor confidence.
That bifurcation isn't a flaw — it's a sign of a maturing market that's differentiating based on track record.
Financing is back, but it's not effortless
One of the biggest questions over the past several years has been whether SPAC transactions can be financed reliably. The answer in late 2025 is yes — but not without effort.
Private investments in public equity (PIPE) markets have reopened, with a growing number of $10 PIPEs (priced at $10 per share to match the SPAC per-share offering price) supporting de-SPAC transactions. While raising capital still takes time and persistence, it's no longer the near-impossible task it was just a year or so ago.
Redemption rates remain high in the aggregate — often exceeding 95% — with a handful of exceptions with rates under 40% and one or two 0% redemption deals towards the end of 2025. But the 95%+ statistic masks an important nuance. In my experience, many current-day SPAC IPO investors go into the market never intending to remain invested post-merger. Their investment model assumes a pre-merger redemption, almost regardless of the value of the business combination transaction. And while that strategy is a shift from the traditional SPAC model, it doesn't necessarily signal failure. It's simply a different approach. What matters more now is whether sponsors and targets can secure committed PIPE or other financing early in the process.
For some high-profile companies, that financing may not need to come into play, but for the majority of SPAC deals, even if the redemption rate ends up in the nineties, it won't necessarily derail the transaction. In fact, Ellenoff noted that several recent deals have closed successfully despite significant redemptions because PIPE capital was fully committed.
Market innovation: Industry themes, not mechanics
From a structural standpoint, the SPAC product itself hasn't changed dramatically in 2025. Instead, innovation has come from industry themes and target strategies.
AI-related businesses remain a dominant focus, alongside data centers, renewables, mining and rare earths. Healthcare and life sciences — longstanding SPAC mainstays — are also quietly reemerging.
The most striking thematic development of 2025 was the digital asset treasury (DAT) strategy, which involved contributing large crypto holdings into SPAC business combinations. While not mechanically innovative, the strategy drew enormous attention earlier this year.
That momentum has cooled for now, reflecting both crypto volatility and rapid market saturation. Still, as Ellenoff noted, crypto cycles can turn quickly — and the DAT strategy story may not be entirely over.
A changed regulatory tone
Perhaps the most underappreciated shift in 2025 has been regulatory.
Under the new Securities and Exchange Commission (SEC) chair, the regulatory environment has become more constructive, with a renewed emphasis on capital formation. Ellenoff noted that while rules remain in place and compliance expectations haven't disappeared, the tone has shifted from adversarial to collaborative.
That change matters. Market participants are more willing to ask questions, explore structures and pursue transactions without fear of automatic condemnation.
This sentiment shift has been felt across SPACs, traditional IPOs and even crowdfunding markets — and it has helped restore confidence in accessing public capital.
Litigation trends: Fewer cases, better outcomes
From a risk perspective, my impression was that 2025 delivered encouraging news.
SPAC-related securities class actions accounted for only about 2% of all filings, down sharply from 8% to 10% in prior years. Even more striking, approximately 45% of securities class actions were dismissed at the motion-to-dismiss stage, a materially higher rate than in previous years.
Our data team reports that while there were fewer SPAC-related securities class action settlements in 2025, some of the settlement amounts were quite significant, with one exceeding $100 million.
Delaware litigation trends have also improved, with courts showing greater willingness to dismiss weak claims. Cayman incorporations, while increasingly common due to the 1% excise tax and the SPAC sponsors' desire to avoid Delaware courts, have so far not generated any meaningful litigation activity.
That said, legal defense costs remain significant, reinforcing the continued importance of robust Directors and Officers (D&O) insurance coverage.
Directors and Officers insurance: A rare buyer's market
One of the clearest benefits of improved litigation trends is pricing. D&O insurance premiums for SPACs are currently the lowest we've ever seen.
Carriers now have several years of data to assess real risk rather than hypothetical exposure, and competition among insurers has driven rates down dramatically. That said, while carriers are ruthlessly competing on price, they're also hedging their risk by reducing coverage, making experienced brokerage guidance absolutely essential. A rock‑bottom premium on a policy may sound great for your bottom line, but it can quickly backfire when a claim comes in and you discover that the policy is full of holes.
What to expect in 2026
Ellenoff believes the market could exceed 200 SPAC IPOs in 2026 — a level that gives all of us pause, even as we acknowledge the strong underlying conditions. It's great to see a revived, vibrant SPAC market again, but we all need to steer away from the exuberance the market experienced in 2020 and 2021 and work towards disciplined, solid growth. In 2026, as more SPAC sponsor teams come to market and start competing with each other for more attractive targets, disciplined execution and realistic valuation will become increasingly important.
PIPE markets are expected to remain open, AI will continue to dominate deal flow, and long-overdue exits from private equity portfolios will keep targets coming.
I predict that the SPAC D&O insurance market will continue to be buyer-favorable for the first half of the year but will then start to harden once newly IPO'd companies start competing for underwriter attention. I also don't anticipating an increase in SPAC-related litigation or enforcement actions for the first half of the year. However, we may see a few new securities class actions when the frequency of SPAC deal announcements picks up, likely in the second half of 2026.
It looks like 2026 is poised to be a busy and productive year for SPACs.
