VC agency Perception receives billions of Israel’s IPOs from Monday.com and WalkMe Stroll
Monday.com will celebrate its IPO on the Nasdaq on June 10, 2021.
In April, Insight Partners’ Jeff Horing hopped into Israel for breakfast with technology CEOs. It was also an opportunity to visit his firm’s first international office, which opened less than two years ago.
Now CEOs of two of these companies are visiting him in New York. They actually come to ring the bell on the Nasdaq as Israel’s high-growth companies line up to enter the public markets.
Last week, collaboration software-as-a-service (SaaS) provider Monday.com held its IPO, closing Friday with a market cap of $ 8.2 billion. This week, Israeli software company WalkMe, whose technology was developed to simplify enterprise software and applications, is slated to go public with a value of up to $ 2.6 billion
Insight is the largest investor in both. The company owns 43% of Monday.com and controls 32% of WalkMe. He currently owns approximately $ 3.9 billion in joint ownership of the two companies.
“Israel has long been the start-up hub, a hotbed of activity,” Horing wrote in an email in response to written inquiries. “But these start-ups scale successfully faster.”
Money goes into Israeli technology. According to a report by IVC and law firm Meitar, the country’s startups raised $ 5.37 billion in the first quarter, more than double last year and 89% more than in the fourth quarter, which was a record period.
Herzliya-based game developer Playtika went public in January and has a market capitalization of $ 10.6 billion. According to FactSet, this makes it the fourth most important listed technology company in Israel. Monday.com ranks fifth and WalkMe is ready to crack the top 10.
For Insight, the opening of an Israeli office in late 2019 marked the company’s first outside of the US since it was founded in 1995. However, Insight has invested in and around Tel Aviv for over two decades.
Horing said the company closed its first deal in Israel in 2000. He highlighted Enigma, a developer of software for manufacturers, and Shunra, a network virtualization company acquired by Hewlett-Packard, as two early investments.
“I’ve always loved visiting Israel and have many memories of tiny market restaurants where I ate amazing food and spent hours arguing about different technologies and SaaS strategies,” said Horing. “My team and I spent countless hours flying back and forth to Israel, often weeks, to meet entrepreneurs and work with our portfolio companies.”
Prior to Monday.com, Insight’s main investment was in software company Wix, which went public in 2013. Insight ran a $ 40 million round in 2011 and had a 12% stake at the time of the IPO.
Wix’s share price has since multiplied 17-fold, giving the company a market cap of $ 15 billion, second only to Check Point Software among Israeli technology companies.
“Wix was a fundamental investment for Insight in Israel,” said Horing. Wix co-founder Avishai Abrahami also sits on the board of directors of Monday.com. Along with Abrahami and Nir Zohar, operations manager at Wix, “we have invested jointly in many Israeli transactions over the years,” said Horing.
Acquisition of the portfolio of an Israeli company
The most noticeable detail on Monday.com’s cap table is the level of Insight’s stake.
Typically, when a multi-billion dollar venture-backed company goes public, the top company would not own more than 30% of the outstanding shares, often much less.
Insight took a unique approach to get 43%. In February 2019, seven months before its Tel Aviv office opened, Insight acquired the majority of a fund portfolio owned by an Israeli firm called Genesis Partners, whose partners were moving to other ventures.
Within this fund, which closed in 2009, Genesis had invested in Monday.com’s Seed and Series A funding rounds. Insight first came out in 2017 as part of the $ 25 million Series B.
After Insight acquired the contents of the Genesis Fund, Insight was able to merge the two companies’ interests and build a stake of now $ 3.1 billion. Genesis was also an early investor in two other Insight-backed companies: online music learning company JoyTunes and business intelligence company Sisense.
Roy Mann, co-founder and co-CEO of Monday.com, told CNBC that Insight was tapping into a major shift in Israeli technology.
“They had very strong convictions about Israel and the Israeli ecosystem,” Mann said in an interview after the IPO. “The entire industry has matured to a level where entrepreneurs want to build large companies and hold them for a long time. Insight recognized this early on, and indeed, many amazing Israeli companies returned.”
Horing rang the opening bell of the Nasdaq on Thursday together with co-founders Mann and Eran Zinman. The company also had 250 employees from cities across the United States
Horing will have the opportunity to do so again this week for the WalkMe IPO. In 2017, Insight led a $ 75 million investment in WalkMe. By moving on to two more rounds of funding, Insight built a 32% stake valued at $ 750 million at the high end of WalkMe’s IPO palette.
Horing said Insight now has 80 “operations experts” in Israel working with portfolio companies and has expanded in Tel Aviv to take over the space previously occupied by JFrog that went public on Nasdaq last year.
What Horing currently finds most exciting about being from Israel, he said, is that there is no shortage of opportunities to make money.
“Israel is firing from all cylinders,” he said. “Of course, cyber is a strong sector, but it’s much broader and encompasses a broad group of SaaS, infrastructure, fintech, gaming and advertising technology.”
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