10 Questions for VTAC

Company Overview

Vertex Technology Acquisition Corporation (VTAC), a Vertex Holdings SPAC, seeks to acquire business(es) at the forefront of technology transformation, creating longterm value for its target company and stakeholders. VTAC aims to acquire or merge with value-creating businesses at a fast growth stage of their life-cycle and will focus its search on AI, Cyber Security and Enterprise Solutions, Consumer Internet and Technologies, FinTech, Autonomous Driving/New EVs, BioMedTech and DigiHealth.

1. Why Do a Special Purpose Acquisition Company (SPAC) Listing Now?

• SPACs have been gaining attention and garnering strong momentum in Asia, in tandem with the rise of numerous technology companies in the region. Facilitating the strong interest in Asian SPACs is also attributed to the diverse set of investors that are familiar with the SPAC offering, with some even being SPAC sponsors in the US.

• Given favourable market sentiments for SPACs in Asia and maturity of local investors, VTAC believes that the time is ripe for a SPAC listing in Singapore. VTAC’s listing will provide public market investors with the opportunity to invest in fast-growing technology companies at the forefront of technological transformation. 8 February 2022

2. How Does VTAC Differentiate Itself From Other SPACs?

• VTAC leverages on the valuable experience of its Sponsor – Vertex Venture Holdings Ltd (Vertex). Vertex is a Singapore-based global venture capital platform, which provides anchor funding and operational support to a proprietary global network of venture capital funds in key innovation hubs. Across the Vertex ecosystem, it manages a portfolio of over US$5.1 billion assets as of 31 Dec 2021 (including divestments) comprising of over 200 companies.

• Vertex has an over 30-year track record of notable investments, having successfully invested in innovative technologies and divested reputable companiesin the US, Europe, Singapore, Hong Kong, China and Taiwan.

• Vertex is also a wholly-owned subsidiary of Temasek Holdings and is reputed as a credible long-term valueadded partner that has been able to supercharge growth and help businesses succeed. Vertex seeks to create value for its start-up portfolio companies through talent recruitment, business development, fundraising and joint venture support, marketing and community development, and regulatory navigation.

3. What Is the Vertex Ecosystem?

▪ The Vertex Ecosystem Comprises Of:
    ▪ Vertex Network Funds – Managed by various independent general partners through a partnership model grouped under Vertex Ventures Israel, Vertex Ventures USA, Vertex Ventures China, Vertex Ventures SEA & India and Vertex Growth with total AUM of approximately US$3.7 billion as of 31 Dec 2021) (including divestments)
    ▪ Vertex Captive Funds – 10 wholly-owned and managed funds with total AUM of approximately US$1.4 billion as of 31 Dec 2021 (including divestments).

• Together, the Vertex Network Funds and Vertex Captive Funds spread across the key innovation markets and ecosystems in Southeast Asia, India, China, US and Israel. With entrenched local teams in each region, Vertex offers in-depth local knowledge, expertise and networksto its stakeholders and investments.

4. Could You Share More About Your Track Record/experience on Past Investments?

▪ Some Recent Notable Investment Exits4 Include:

• Accolades from industry specialists is a testament of Vertex’s strength in guiding the success of disruptively transformational start-ups. In 2019, Vertex has been recognised by Crunchbase as among the Top-5 most active Privacy and Security Investors globally.
• Furthermore, for the third consecutive year in 2020, the General Partner of Vertex Ventures China was recognised with the “Golden Bull Venture Capital Annual Outstanding Institution” award by China Securities Journal5 and shortlisted in “Forbes 2020 – Top 100 China’s Best Venture Capitalists” 6.

5. How Is Vertex, the Sponsor, Aligned With Interests of Minority Shareholders of VTAC?

• VTAC is structured by the Sponsor to align its long-term interests with investors by committing to the successful completion of the initial business combination. Vertex has committed S$30 million in capital through the subscription of VTAC Units (known as Sponsor IPO Investment Units) that are locked up till six months after the completion of the initial business combination.

• Additionally, the Sponsor will also contribute 'at-risk' capital of up to S$10 million by entering into a private placement warrants purchase agreement with VTAC, pursuant to which the Sponsor shall procure Vertex Co-Investment Fund Pte. Ltd. (Vertex SPV), a wholly owned subsidiary of the Sponsor, to subscribe for private placement warrants which will become exercisable on the later of the date that is 30 days after the completion of the initial business combination or 12 months from the date of closing of the offering. The at-risk capital shall be used to pay for offering expenses and operating expenses.

• Following the completion of the initial business combination, up to 10.59 million shares will also be allotted and issued to Vertex SPV, subject to a time-based and price-based vesting schedule after the initial business combination. Such vesting schedule aligns the interest of the Sponsor with the other shareholders.

6. How Will VTAC be Using the Proceeds Raised From the IPO?

• 100% of gross proceeds raised from the offering (including proceeds raised from the exercise of the over-allotment option, if any) and the issuance of units to the cornerstone investors and the Sponsor IPO Investment Units will be placed in an escrow account, which is beyond the 90% requirement in listing rules.

• These gross proceeds may only be used for the consummation of the initial business combination, and the payment of deferred underwriting commissions. Interest earned on the escrow funds may be used to pay income taxes and operating expenses, if any.

7. When Will the Initial Business Combination Happen and What If It Does Not Materialise?

• VTAC must complete an initial business combination within 24 months from the listing date (or may be extended up to 12 months pursuant to approvals and subject to an overall maximum time frame of 36 months from listing date). The initial business combination will be subject to the simple majority approval of the independent directors of VTAC as well as an ordinary resolution passed by the shareholders at a general meeting to be convened for this purpose.

• In the event that an initial business combination is not consummated, the amount then on deposit in 1) the escrow account, including interest earned and not released to pay for taxes or operating expenses, if any (less any liquidation expenses); and 2) any other bank accounts held by VTAC, will be returned to shareholders, cornerstone investors and the Sponsor.

8. Could you share more about your investment philosophy? What do you look at when evaluating a potential acquisition target?

• VTAC’s mandate is to complete an initial business combination with a business having a core technology focus with highly differentiated products and scalable business models that aims to improve people’s lives by transforming businesses, markets and economies.

• Our selection criteria include identifying targets that are at an inflection point of its growth journey, with a strong management team and possess cross-border potential. These targets must have market leadership and be attractively priced relative to its peers which may provide upside potential and benefit from public market access.

• Translating the above selection criteria, VTAC intends to focus on the following six investment themes:

9. How Will You Find Your Target for a Business Combination?

• As a limited partner of Vertex Network Funds, Vertex has the benefit of receiving proprietary insights on a regular basis on the performance, growth and market outlook of the investee companies within the Vertex Network Funds. This allows VTAC to have key insights in identifying and evaluating the suitability of such investee companies within the Vertex Network Funds as potential business combination targets.

• In addition, VTAC’s management team (with the support of Vertex and its subsidiaries as well as the Vertex Captive Funds and the Vertex Network Funds) has also built a broad network of contacts and corporate relationships globally. This network has grown over the years, and we believe that it will provide us with valuable insights into potential investment opportunitiesfrom third-party sources.

10. What is VTAC’s value proposition to its shareholders and potential investors? What areas would you point investors to?

• VTAC seeks to create long-term value for our target company and stakeholders by leveraging our Sponsor's global network, well-established shareholder ecosystem and deep local expertise.

• VTAC’s listing on 20 January 2022 as Singapore’s first SPAC is only the beginning of the journey. Looking ahead, VTAC places greater emphasis on identifying a suitable target company that will yield a strong business combination at the de-SPAC stage.

• With the guidance of its Sponsor, it looks to grow the target company to greater heights and strive to provide greater value for VTAC’s stakeholders.

10 in 10 – 10 Questions in 10 Minutes With SGX-listed Companies

Designed to be a short read, 10 in 10 provides insights into SGX-listed companies through a series of 10 Q&As with management. Through these Q&As, management will discuss current business objectives, key revenue drivers as well as the industry landscape. Expect to find wide-ranging topics that go beyond usual company financials.

This report contains factual commentary from the company’s management and is based on publicly announced information from the company.