Online Used Car Retailer Shift Talking Merger With Insurance Acquisition

Shift Technologies Inc., an online retailer for used cars, is in talks to merge with blank-check company Insurance Acquisition Corp., according to people familiar with the matter.

The companies could announce a transaction within a month, said the people, who asked to not be identified because the matter isn’t public. Shift is aiming to be valued at more than $500 million in the deal, one of the people said.

Insurance Acquisition is also in talks to raise an additional $100 million from institutional investors as part of the deal, the people said. No final decision has been made and talks could fall through, they said.

Shift would become publicly traded as part of the transaction through Insurance Acquisition’s New York listing. Those shares closed up 7.5% Friday.

Blank-check firms, also known as special purpose acquisition companies, have become a popular way for companies — including venture capital-backed startups — to go public after successful deals by Virgin Galactic Holdings Inc. and DraftKings Inc. Potato chip maker Utz Quality Foods and veteran dealmaker Chinh Chu’s vehicle Collier Creek Holdings announced a plan to merge this month.

Insurance Acquisition raised about $150 million in an initial public offering in 2019.

A representative for Shift declined to comment while a representative for Insurance Acquisition didn’t immediately respond to phone calls and emails seeking comment.

Shift, a platform that allows users to buy and sell second-hand vehicles, has raised funding from BMW i Ventures Inc., G2VP, Goldman Sachs Group Inc. and venture capital firm DCM, among other backers, according to its website.

Rival auto sales platform Vroom Inc. soared in its trading debut this month, marking the second-best debut for a U.S. listing in 2020, according to data compiled by Bloomberg.

Editor’s Note: Shift Technologies is a different company than Shift Technology, an AI company serving the insurance industry.