WalkMe’s $287 million IPO on the Nasdaq market Wednesday was just the latest in what has been a very busy year for public share offerings for Israeli companies.
Shares of the Tel Aviv-based company, whose platform helps businesses simplify their online experience and eliminate user confusion, opened at $31 as trading began Wednesday, but fell 7% to $28.81 on its first day of trading.
That came just a week after monday.com completed a $6.8 billion IPO on the Nasdaq in one of the largest ever American IPOs by an Israeli company. Shares of the work management platform have skyrocketed 38% since the stock opened at $155, reaching $214.12 before trading opened Thursday.
Last month, cross-border e-commerce platform Global-E raised $375m. at a valuation of $3.5b. with a stock offering that has since gone up 85%. A week before that, web traffic analytics company Similarweb raised $165m. at a valuation of $1.6b. That share has since fallen 7%. And in January, Playtika, a mobile gaming platform, raised $1.9b. at an $11b. valuation. That share now trades at $24.43, down from the issue price of $27, after peaking above 36% in February.
There are more in the pipeline. Cybersecurity company SentinelOne recently filed the prospectus for an offering that may value the company at $10b. App monetization firm ironSource is expected to raise up to $2.3b. at a value of approximately $11.1b. in a SPAC merger that would be the largest public offering ever by an Israeli company. Trading platform eToro is planning a SPAC offering at an estimated valuation of $10.4b. Native web advertising platform Taboola is expected to go public with a SPAC on the New York Stock Exchange valuing the company around $2.6b. And OrCam, which develops technology to assist blind and visually impaired people, is said to be planning to raise $300m. at a $3b. valuation.
These are all in addition to a bevy of new stock offerings on the Tel Aviv Stock Exchange and foreign exchanges since the beginning of 2021.
THERE ARE several reasons for the explosion in stock offerings. First, the rapid rise in stock prices in the US over the past year has made the prospect of going public in New York very enticing for CEOs around the world, not just in Israel. After initial pandemic jitters rocked stock prices last winter, the Nasdaq Composite Index has risen a meteoric 42% in the past twelve months, and for many, there has never been a better opportunity to raise money.
Next is the SPAC trend that has made going public much easier. An SPAC, or special purpose acquisition company, is a shell company with no assets that can be created and floated on the market, and later get filled in by merging with an existing corporation. This method allows a company to go public relatively quickly while skipping a lot of the heavy bureaucracy that goes into filing for an IPO. SPACs have existed for decades on the shady fringes of the market, but the ease of using them has made them one of the hottest stock trends of recent years.
Meanwhile, Israel’s hi-tech sector is extremely developed and mature, with record-breaking fundraising activity for startups. Israeli start-ups have raised more than $10.7b. since the start of the year, topping the total raised for 2020, which was a record then, in less than half the time. The country has more than 70 “unicorns” – private companies valued at more than $1 billion, many of whom are likely future IPO candidates.
Israel now has a lot of second- and third-time founders who, after selling their first venture, are dedicated to building larger companies with the intention of sticking around for the long run. These founders aren’t as hungry to cash out, and they often bring extensive experience to the table after working with the multinational companies that acquired them.
It also helps that many of the kinds of technology fields that Israel excels at, like cybersecurity, work automation and business platforms, are exactly the fields that came into the limelight during the pandemic.