G Squared Ascend I Inc. (NYSE:GSQD) announced this morning that it has mutually terminated its combination with digital freight software company Transfix and its sponsor will instead invest in the company privately.

The parties blamed “current public market conditions” for nixing the deal, which was announced over a year ago in September 2021. While the parties had not yet set a date for a completion vote, G Squared may have struggled to hit the deal’s $200 million minimum cash condition in this redemptions climate despite having a $60 million forward-purchase agreement and $50 million backstop.

But with the changing market appetites, this could have also simply been a case of the two sides unable to come together on a re-strike. Transfix grew revenue at a CAGR of 81% from 2016 to 2020, but at the time of the deal’s announcement, it did not expect to be EBITDA positive until 2024E. As such, it may have had to wait for a while before a market focused on cash generation would give it its due.

This could still wind up as a missed opportunity, however. The terms of Transfix’s pending private round with G Squared and fellow existing investor New Enterprise Associates have not been made public yet, but it seems likely that it will be at a valuation below the $1.05 billion envisaged in this deal.

In a similar scenario, ticket marketplace company Seat Geek terminated its combination with RedBall in June, which would have valued it at $2.0 billion pro forma equity value with $100 million in committed capital from a combination of a private placement and PIPE. SeatGeek then turned around and raised $238 million in a private Series E at a valuation at $1 billion pre-money.

Should either company seek to go public again, it will have been after one more round of dilution and possibly on less favorable terms than they had in hand. G Squared, meanwhile, will be gaining an increased share in Transfix in either scenario, but its SPAC is now in a less favorable position coming up on a February 9, 2023 transaction deadline in what may still be a difficult market to extend with low redemptions.