AI-supported asset manager Pagaya to go public via merger with SPAC

Pagaya, an American and Israeli fintech firm that uses artificial intelligence (AI) to manage institutional money, is going public through a merger with special purpose acquisition company EJF Acquisition Corp. The deal would value the company at $8.5B, and existing investors are expected to retain a 94% ownership stake in the company.

Why should we care?
The deal will allow Pagaya to expand the reach of its AI-based network, which processed more than 17 million applications in the last 12 months as of the end of June 2021. Payaga serves banks and other financial services companies, including institutional investors, high-net-worth investors, sovereign wealth funds, pension funds, insurance companies, and foundations. Its platform analyzes data to help client firms meet the needs of their customers more effectively. Pagaya’s partners work across unsecured consumer, auto, credit card, point-of-sale, and real estate sectors. The company plans to offer credit solutions for mortgages and insurance related products in the future. “Legacy systems are historically fractured and inefficient. We identified a significant opportunity to address the inefficiencies of the current system by constructing a network powered by our proprietary AI technology,” Gal Krubiner, co-founder and CEO of Pagaya said in a statement.