By Echo Wang
NEW YORK (Reuters) -Artificial intelligence startup Brand Engagement Network (BEN) on Thursday agreed to go public through a merger with a blank check acquisition company in a deal valuing the combined company at $358 million.
The deal with DHC Acquisition Corp will provide Brand Engagement Network with about $40 million in gross proceeds, the company said, confirming an earlier Reuters report.
“BEN, because of its partnerships, doesn't have the same capital requirements as many others SPAC companies had previously.” Said Chris Gaertner, Co-CEO and CFO of DHC.
The popularity of ChatGPT has led to a flurry of investments in AI-focused ventures and startups, even as the wider funding environment remains challenging.
Artificial intelligence and machine learning startups globally have raised about $39.4 billion so far this year, according to PitchBook.
Headquartered in Jackson, Wyoming, Brand Engagement Network is a provider of AI-powered chatbots and conversational AI technology to companies in industries like automotive, healthcare, and customer service. Brand Engagement Network's AI offerings help companies with services, including data leakage prevention and identity verification.
DHC Acquisition Corp, a special purpose acquisition company (SPAC) which raised $309 million through its initial public offering in 2021, cut the size of its offering to $47 million earlier this year after securing an extension of its life from shareholders.
SPACs are shell companies that raise money in an initial public offering and put it in a trust for the purpose of merging with a private company and taking it public. SPACs typically have up to two years from the time they list their shares to close a merger.
Since investors are unaware of the target company ahead of the IPO, SPACs often grant them the right to redeem their initial investment as an incentive to put their money in the trust.
After the deal closes, the combined company will be named BEN and will be listed on the Nasdaq under the ticker "BNAI".
Cohen & Company Capital Markets was the financial adviser on the deal.
(Reporting by Echo Wang in New York; Editing by Anirban Sen, Leslie Adler and David Gregorio)