Recently, there has been a lot of hype over a group of companies called "special purpose acquisition companies" (SPACs). SPACs are "shell companies" or "blank check companies" that seek to help privately-held companies raise funds and take them public. SPACs are already publicly-listed so by acquiring the private firm in a "reverse IPO" makes the process of going public faster and reduces the costs of the process. However, I am unsure why it bears the name "reverse IPO". In what way is this process a "reverse" of the normal process?
It is because of the timeline.
It is called a reverse IPO because the SPAC IPOs first as a blank check company (i.e. has a pool of funds). Then it uses that capital to 'merge' with a private company, which effectively takes that company public. Hence "reverse IPO" or "reverse merger".
A reverse IPO is frequently called as a 'Reverse Takeover' or a 'Reverse Merger.' I believe if you try to comprehend 'Reverse IPO' in itself, you will not find anything convincing. But if you perceive it from the Reverse Takeover or Reverse Merger view, might appear more logical.