A darling in the capital markets only a year ago, the use of special-purpose acquisition companies to raise funds for tech and real estate entities is now in a serious slump, and even those companies that have completed the process face various challenges.

Altogether, de-SPACs (SPACs that have merged with acquisition targets) have done poorly since 2018, according to PitchBook’s de-SPAC Index, which has dropped about 65% since then, with most of the decline since the beginning of this year.

Also, almost 50% of de-SPACs reported "material weaknesses" or "ineffective controls," Bedrock found in an analysis of Securities and Exchange Commission filings. That compares to about 20% in the overall corporate population.

For real estate-related SPACs, the outlook is particularly sluggish.

Only seven of the 27 SPACs formed to focus on real estate have seen a completed deal in the last two years, CoStar reports, counting the entities on which it has reported.

Equity Distribution Acquisition Corp., a SPAC formed by real estate billionaire Sam Zell in 2020, ran out the clock this August without finding a suitable investment target.

Overall, investors are losing interest in the vehicle.

In 2021, SPACs raised more than $160B, while in 2022, the total so far is only about $13B, according to SPAC Research. Last year, 613 SPACs completed an IPO; this year so far, 76 have.

On Thursday, SPAC specialist Chamath Palihapitiya decided to unwind two tech-oriented blank-check vehicles, pointing to the disconnect between buyers and sellers when it comes to pricing as a main reason.