A delegation from the Australian Securities Exchange (ASX) is visiting Israel this week to drum up listings of Israeli companies down under. This is the sixth trip Australian officials have made to Israel since the end of 2016.
Led by ASX chairman Rick Holliday-Smith, who is visiting the so-called Startup Nation for the first time, the delegation of 10 people includes four Australian fund managers who are looking for investment opportunities. They have come to learn more about the Israeli firms that have already listed their shares on the ASX and to review other startups that could be considering a listing or may be looking for pre-IPO funding. The delegation will be in Israel till Friday.
“We were very specific about who we invited to come with us to Israel,” said Max Cunningham, the general manager of listings at the ASX, by phone from Jerusalem. They needed to be “good-sized” funds that are interested in technology stocks and first timers to Israel. The idea is to increase the exposure of Israeli tech companies to Australian investors, Cunnigham said.
The Nasdaq and the New York Stock exchange may the most aspired-to destinations for many Israeli entrepreneurs, but other exchanges like Australia and Canada are also vying for a piece of the pie.
Seventeen Israeli companies have listed their shares on the ASX, including five new listings in 2017, but none this year so far, according to data provided by the ASX.
Of the five firms that listed their shares in 2017, G Medical Innovations, a provider of mobile e-health solutions that listed its shares on May 8, raising AUD12 million (some $9 million), has seen its share rise 43 percent, bringing its market value to some AUD99 million, as of April 26. Elsight Ltd., a security and surveillance data firm, has advanced 165% for the period, since the listing of its shares on June 8, while Mobilicom Ltd. and e-sense Lab Ltd. which also listed in May and June this year, respectively, have declined 65% and 15%.
The average return of the Israeli companies since their listing on the ASX has been 74%, the data shows, with the total market capital of the Israeli companies listed on the ASX valued at AUD1.4 billion.
In 2017 the number of companies that listed on the ASX was less than expected, said Cunningham. Just three companies listed on the exchange between May and December 2017, he said: G Medical, Elsight and Roots Sustainable Agriculture Technologies, which develops precision agriculture devices.
Tthat is because six companies that were in the pipeline for listing their shares delayed their IPO, opting instead for pre-IPO funding rounds. “This is actually positive,” Cunningham said. This means the companies managed to get access to funds in Australia and will be able to grow sales and get advice from their fund managers before undertaking an IPO, which typically follows some six to 24 months after a pre-IPO funding round,” he explained. “Some companies can list too early and it costs management time and pressure.”
The six Israeli startups companies that raised pre-IPO funds raised between AUD5 million and AUD15 million, he said.
“We are optimistic we will get two to four Israeli IPOs done in 2018,” he said, two or three of them from those companies that held the pre-IPO funding round. He said he believes the share offerings will be at amounts higher than those raised to date by Israeli firms on the ASX.
The ASX has been focusing its efforts on encouraging foreign companies to list on its exchange. It has been actively investing time and money in helping startup companies grow, mentoring them and investing in incubators and accelerators. It facilitates connections with VCs and small funds and then assists them to map out what should they look like as a public company, and how long they should wait before selling shares to the public.
The ASX is also working with SOSA — an Israeli company that connects startups with investors and corporations — to help the exchange tap into Israeli artificial intelligence technologies that can be integrated with the exchange’s announcement platform for the continuous feed of company disclosures and price sensitive announcements by companies. “We want to see if there are any AI solutions that can better interpret the information,” Cunningham said.