Israeli English grammar correction and translation software developer WhiteSmoke Inc. has filed a draft prospectus with the US Securities and Exchange Commission (SEC) to raise $23 million in an IPO on Nasdaq. The company did not disclose the company value for the planned offering. The share will be listed under the ticker "WHSM".
Husband and wife team WhiteSmoke chairwoman and CEO Hilla Ovil-Brener and VP R&D Liran Brener founded the company in 2002. The company's flagship product, the WhiteSmoke Writer is an English grammar, spelling, punctuation, and style program. The company launched its WhiteSmoke Translator program two years ago, and it is currently available for nine languages.
The WhiteSmoke Translator program competes directly with Babylon Ltd. (TASE:BBYL), as well as several other companies, including Editor Software Ltd. of the UK, Linguistics Inc. and Ginger Software Inc. of the US, as well as Microsoft Corporation's (Nasdaq: MSFT) spellchecker for its Word and other programs.
WhiteSmoke's third and latest product is a downloadable toolbar, which is responsible for a third of its revenue.
WhiteSmoke plans to expand by opening representative offices in the US, Europe, and Asia, and to leverage its collaboration with US learning solutions developer Pearson Education into the government and corporate markets.
Although WhiteSmoke has been increasing its revenue, it is not yet a profitable company. Revenue was $5.1 million in 2010, 58% more than in 2009, and its net loss was $1.9 million.
The company has 67 employees, of whom only seven work in R&D.
Evolution Fund LP owns 25.4% of WhiteSmoke, the Brener's own 13%, and Yair Goldfinger owns 5.7%. According to IVC, the company has raised $7 million since it was founded.
The lead underwriters are EarlyBird Capital Inc. and Rodman & Renshaw. The IPO is also intended in part to repay a bridge loan to Evolution Venture Capital Fund.
Published by Globes [online], Israel business news - www.globes-online.com - on May 15, 2011
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