Israel’s IVC Research Center, a data company that tracks the Israeli tech scene, has pinpointed 24 Israeli firms that are ripe to hold an initial public offering of shares on the stock market, based on the amount of funds they raised in their latest funding round.
At the top of the list is ride-sharing firm Gett, which raised $300 million in 2016, bringing the total funds raised by the firm to $522 million. Another ridesharing firm, Via Transportation, which has raised a total of $387 million to date, is second on the list, followed by IT firm Skybox Security, which has raised a total of $296 million to date.
The Israeli potential IPO pipeline companies are mainly in the information technology and software sector: 11 companies out of the 25, including Checkmarx, Infinidat and CyberReason. Five are internet companies, among them Outbrain, Taboola, Kaltura and Fiverr. The communications and life sciences sectors each have three companies, and the semiconductors sector offers two, OrCam and Valens Semiconductor.
“IPOs are the jewel in the crown of exits,” IVC said in the report. By offering shares to the public, entrepreneurs and investors get a source of liquidity that can accelerate their growth.
In the last decade, the report said, Israeli tech companies that completed a successful IPO — defined as raising more than $50 million in the share offering — raised on average a large financing round of $40 million prior to the IPO. It is according to this criterion that IVC compiled its list of 24 firms that are ripe for an IPO, as all of them raised at least $40 million in a later-stage financing round — a third round and up — in the past two years.
Assuming these companies are well financed and have their investors’ confidence, these firms “might be considered as IPO pipeline companies,” the report said.
Eight Israeli companies went public at the first nine months of 2017. Only two, medical devices company UroGen Pharma and Forescout, listed on NASDAQ. Given that NASDAQ and the New York Stock Exchange (NYSE) are expensive markets to list on and the companies need to have high valuations prior to listing, Israeli companies have started looking for new sources of liquidity. Five Israeli companies went public on the Australian Stock Exchange (AXE) this year and three listed on the Tel Aviv Stock Exchange (TASE), IVC data showed.
As IPOs are the first stop in a company’s new status, the performance in the public markets as a debut share is crucial, IVC said. “It looks like 2017 is a good year in this aspect as well,” the authors of the IVC report said.
A survey by TechCrunch found that most of the tech companies that have gone public in 2017 are trading above their IPO price.