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Fair Value Measurements
 6 Months Ended 11 Months Ended
Jun. 30, 2021
Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair Value Measurements Fair Value Measurements The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
As of June 30, 2021
Description
Quoted Prices in 
Active Markets
(Level 1)
Significant Other
Observable Inputs
(Level 2)		Significant Other
Unobservable Inputs
(Level 3)
Assets:
U. S. Treasury Securities$414,268,577 $— $— 
Liabilities:
Derivative warrant liabilities—Public Warrants33,741,000 — — 
Derivative warrant liabilities—Private Warrants— — 16,756,400 
Total fair value$448,009,577 $— $16,756,400 
As of December 31, 2020
Description
Quoted Prices in 
Active Markets
(Level 1)
Significant Other
Observable Inputs
(Level 2)		Significant Other
Unobservable Inputs
(Level 3)
Assets:
U. S. Treasury funds$414,209,593 
(1) 
$— $— 
Liabilities:
Derivative warrant liabilities—Public Warrants35,386,050  — — 
Derivative warrant liabilities—Private Warrants—  — 18,415,060 
Total fair value$449,595,643  $— $18,415,060 

Transfers to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. There were no transfers between levels for the six months ended June 30, 2021.
The fair value of the Private Placement Warrants has been estimated using a Monte Carlo simulation model each measurement date. The fair value of the warrants issued in connection with the Public Offering were initially measured at fair value using a Monte Carlo simulation model and subsequently measured based on the listed market price of such warrants. The Company estimates the fair value of the warrants at each reporting period, with changes in fair value recognized in the condensed statements of operations.
The estimated fair value of the derivative warrant liabilities – Public Warrants is determined using Level 1 inputs. The estimated fair value of the derivative warrant liabilities –Private Placement Warrants is determined using Level 3 inputs. Inherent in a Monte-Carlo simulation are assumptions related to expected stock-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its ordinary shares based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
 June 30, 
2021		 December 31,
2020
Volatility23.5 % 25.3 %
Stock price$9.95  $10.26 
Expected life of the options to convert5.05 5.42
Risk-free rate0.88 % 0.42 %
Dividend yield0.0 % 0.0 %
The change in the fair value of the derivative warrant liabilities measured using Level 3 inputs, for the three and six months ended June 30, 2021 is summarized as follows:
Warrant liabilities at January 1, 2021$18,415,060 
Change in fair value of derivative warrant liabilities$(7,761,500)
Derivative warrant liabilities at March 31, 2021$10,653,560 
Change in fair value of derivative warrant liabilities6,102,840 
Derivative warrant liabilities at June 30, 2021$16,756,400 
 FAIR VALUE MEASUREMENTS
The Company follows the guidance in FASB ASC Topic 820, “Fair Value Measurements”, for its financial assets and liabilities that are re- measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis as of December 31, 2020 by level within the fair value hierarchy:
DescriptionQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs (Level 2)Significant Other Unobservable Inputs (Level 3)
Investments held in Trust Account:
U.S. Treasury securities$414,209,593 $— $— 
Liabilities:
Derivative public warrant liabilities$35,386,050 $— $— 
Derivative private warrant liabilities$— $— $18,415,060 
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in September 2020, when the Public Warrants were separately listed and traded.
Level 1 instruments include investments in government securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The fair value of the Public Warrants issued in connection with the Public Offering and Private Placement Warrants were initially measured at fair value using a Monte Carlo simulation model and subsequently, the fair value of the Private Placement Warrants have been estimated using a Monte Carlo simulation model each measurement date. The fair value of Public Warrants issued in connection with the Initial Public Offering have been measured based on the listed market price of such warrants, a Level 1 measurement, since September 2020. For the period ended December 31, 2020, the Company recognized a charge to the statement of operations resulting from an increase in the fair value of liabilities of $28.5 million presented as change in fair value of derivative warrant liabilities on the accompanying statement of operations.
The estimated fair value of the Private Placement Warrants, and the Public Warrants prior to being separately listed and traded, is determined using Level 3 inputs. Inherent in a Monte Carlo simulation are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary share warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
As of July 28, 2020As of December 31, 2020
Volatility16.1%25.3%
Stock price$9.59$10.26
Expected life of the options to convert6.005.42
Risk-free rate0.35%0.42%
Dividend yield0.0%0.0%
The change in the fair value of the derivative warrant liabilities for the period from February 11, 2020 (inception) through December 31, 2020 is summarized as follows:
Derivative warrant liabilities at February 11, 2020 (inception)$— 
Issuance of Public and Private Warrants25,275,880 
Change in fair value of derivative warrant liabilities28,525,230 
Derivative warrant liabilities at December 31, 2020$53,801,110 
Marketwise, LLC    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair Value Measurements Fair Value Measurements
The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:
June 30, 2021
Level 1Level 2Level 3Aggregate Fair Value
Assets:
Money market funds$101,503 $— $— $101,503 
Total assets101,503 — — 101,503 
Liabilities:
Derivative liabilities, current— — 662 662 
Derivative liabilities, noncurrent— — 1,955 1,955 
Class B Units - related party— — 1,235,648 1,235,648 
Total liabilities$— $— $1,238,265 $1,238,265 
December 31, 2020
Level 1Level 2Level 3Aggregate Fair Value
Assets:
Money market funds$25,016 $— $— $25,016 
Total assets25,016 — — 25,016 
Liabilities:
Derivative liabilities, noncurrent— — 4,343 4,343 
Class B Units - related party— — 593,235 593,235 
Total liabilities$— $— $597,578 $597,578 
The level 3 liabilities relate to our Class B Units and certain employee and non-employee contracts with embedded derivatives, see Note 8, Derivative Financial Instruments and Note 9, Stock-Based Compensation.
The following table summarizes the change in fair value of the derivative liabilities during the six months ended June 30, 2021 and 2020:
Balance at January 1, 2021$597,578 
Change in fair value of derivative instruments(1,726)
Incremental Class B Units43,880 
Change in fair value of Class B Units598,533 
Balance at June 30, 2021$1,238,265 
Balance at January 1, 2020$119,307 
Change in fair value of derivative instruments997 
Incremental Class B Units11,258 
Change in fair value of Class B Units49,796 
Balance at June 30, 2020$181,358 

The following table summarizes the change in fair value of the Class B Units by income statement line item during the three and six months ended June 30, 2021 and 2020:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Cost of revenue$10,446 $13,848 $112,389 $9,885 
Sales and marketing840 1,022 8,263 1,022 
General and administrative35,703 57,616 477,881 38,889 
Total change in fair value of Class B Units$46,989 $72,486 $598,533 $49,796 

To derive the fair value of the Class B Units, we estimated the fair value of Class B Units using a valuation technique. For more information regarding the valuation of the Class B Units, see Note 9, Stock-Based Compensation.
Fair Value Measurements
The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the date indicated:
December 31, 2020
Level 1Level 2Level 3Aggregate Fair Value
Assets:
Money market funds
$25,016 $— $— $25,016 
Total assets
25,016 — — 25,016 
Liabilities:
Derivative liabilities, noncurrent
— — 4,343 4,343 
Class B Units - related party
— — 593,235 593,235 
Total liabilities
$— $— $597,578 $597,578 
December 31, 2019
Level 1Level 2Level 3Aggregate Fair Value
Assets:
Money market funds
$133,631 $— $— $133,631 
Total assets
133,631 — — 133,631 
Liabilities:
Derivative liabilities, noncurrent
— — 1,274 1,274 
Class B Units - related party
— — 118,033 118,033 
Total liabilities
$— $— $119,307 $119,307 
The level 3 liability recognized within Long term liabilities – related party on the consolidated balance sheets relates to our Class B Units, see Stock-Based Compensation note.
The following table summarizes the change in fair value of the derivative liabilities during the years ended December 31, 2018, 2019 and 2020:
Balance – January 1, 2018$104,504 
Additions of derivative instruments at fair value
580 
Change in fair value of derivative instruments
217 
Redemptions of derivative instruments
(3,156)
Incremental Class B Units
5,343 
Change in fair value of Class B Units
5,733 
Balance – December 31, 2018$113,221 
Change in fair value of derivative instruments
478 
Incremental Class B Units
8,611 
Change in fair value of Class B Units
(3,003)
Balance – December 31, 2019$119,307 
Change in fair value of derivative instruments
3,069 
Incremental Class B Units
18,745 
Change in fair value of Class B Units
456,457 
Balance – December 31, 2020$597,578 
The change in fair value of Class B Units recognized in Cost of revenue, Sales and marketing and General and administrative expenses was $86,907, $6,545 and $363,005, respectively, during the year ended December 31, 2020. The change in fair value of Class B Units recognized in Cost of revenue and General and administrative expenses was $548 and $2,455, respectively, during the year ended December 31, 2019. The change in fair value of Class B Units recognized in Cost of revenue and Sales and marketing expenses was $5,519 and $214, respectively, during the year ended December 31, 2018.
To derive the fair value of the Class B Units, we estimated the fair value of Class B Units using a market approach and a discounted cash flow approach and allocated the value of the Company to the various common units using an option pricing model. Key unobservable inputs for this valuation were our projected cash flows, volatility and the discount rates. Changes to these inputs could have a material impact on the accompanying consolidated financial statements. See Common Units note.