Cartesian Growth Corporation III Upsizes IPO Amid Strong SPAC Demand

Cartesian Growth Corporation III, the latest SPAC vehicle from Cartesian Capital Group, has priced its upsized initial public offering at $240 million, marking a 20% increase from its original target. The offering, which began trading on Nasdaq on May 2, highlights the resilience of SPACs in a market seeking high-growth investment opportunities.

The IPO’s structure offers investors a mix of immediate liquidity and potential upside, though risks remain tied to the company’s ability to execute a successful business combination.

The Offering Details: A Closer Look

The SPAC sold 24 million units at $10 each, with each unit containing one Class A ordinary share and a half-warrant exercisable at $11.50 per share. Once separated, the shares and warrants will trade under “CGCT” and “CGCTW,” respectively. The underwriting syndicate, led by Cantor Fitzgerald, also holds a 45-day option to purchase an additional 3.6 million units—a greenshoe provision intended to stabilize the offering if demand exceeds expectations.

The $11.50 exercise price for warrants sits above the IPO price, creating an immediate premium that could deter early exercise. Historically, such structures have mixed outcomes: warrants often remain out of the money for extended periods unless the SPAC’s post-merger stock price surges.

Why Cartesian Growth Corporation III Stands Out

Led by Chairman Peter Yu, Cartesian Capital Group has a track record of targeting transnational businesses, a strategy that aligns with the current focus on global supply chains and cross-border opportunities. The firm’s prior SPACs, including Cartesian Growth Corp. I and II, have pursued acquisitions in sectors like renewable energy and logistics—areas that remain under pressure but offer long-term growth potential.

The company’s classification as an emerging growth company under the JOBS Act also grants it regulatory flexibility, including extended filing deadlines and reduced disclosure requirements. This could streamline its path to a merger while minimizing compliance costs.

Market Context: SPACs in 2025—A Mixed Landscape

While Cartesian’s upsized offering signals investor appetite for SPACs, the sector remains volatile. Post-merger SPACs have underperformed the broader market in recent years, with many failing to justify their premiums.

However, the $240 million raise places Cartesian III among the larger SPAC IPOs this year, suggesting that sponsors with strong track records can still attract capital.

Key Risks and Considerations

• Valuation Pressure: The $11.50 warrant exercise price implies investors must see the stock rise 15% from the IPO price to profit.
• Time Constraints: SPACs have 24 months to complete a merger, a timeline that has proven challenging in slow-moving markets.
• Regulatory Scrutiny: The SEC has intensified oversight of SPAC disclosures and post-merger accounting, which could delay deals.

Conclusion: A Calculated Gamble

Cartesian Growth Corporation III’s upsized IPO underscores the enduring allure of SPACs for investors seeking exposure to high-growth sectors. With $240 million in trust and a sponsor with cross-border expertise, the SPAC is well-positioned—if it can navigate regulatory hurdles and identify a target that justifies its valuation.

Historical data offers caution: SPACs that completed deals in 2022 returned an average of -22% through mid-2024 (per SPAC Research), compared to the S&P 500’s -3% decline. Yet, outliers like Merge Technology Acquisition Corp., which merged with a robotics firm, delivered gains of over 40%.

For Cartesian III to succeed, its target must align with its transnational focus while offering scalability in a post-pandemic economy. Investors should weigh the 20% upsizing—a positive signal—as well as the 45-day greenshoe option, which could stabilize pricing early on. The road ahead is fraught with risk, but the stakes are undeniably high.