Israeli start-up Traffix Systems, which is being acquired by US company F5 (Nasdaq: FFIV) for $140 million is an impressive exit. The load management solutions company is being bought for cash, and has only raised $12 million since its establishment. The company raised $7 million in November 2011 led by Bessemer Venture Partners. In annual terms that last round of financing earned its investors returns of eight to nine times their investment in just over three months.
Another venture capital fund that invested in Traffix is Stage One Ventures, which has been involved in the start up since it was in the Lab One incubator. Stage One is Traffix's largest shareholder with a 30-35% stake and returns of ten times its investment. Also a big winner is the investment fund of 888 Holding plc (LSE:888) founders the Shaked brothers holding a 10-15% stake in Traffix. Veteran entrepreneur Benny Schnaider who served as chairman of Traffix holds a 5% stake.
Traffix was founded by CEO Ben Volkow, VP R&D Gil Shafran and CTO Lenny Ridel and started out in the Lab One incubator. The three founders will receive $15 million from the sale.
The company's solutions respond to the gap between high demand for cellular communications needing to provide high quality multimedia services.
Talks were swift according to Volkow. He said, "Although we had money in the bank after November's fund raising, and overall things were going well, we saw synergy with F5 and think that it is right."
Volkow said that the company, which has 65 employees, will be hiring many more at its strategic development center in Israel.
This is F5's third acquisition in Israel having bought MagniFire Websystems, Inc. for $30 million and Crescendo Networks Inc. for $5.6 million but would seem to be the US company's first strategic acquisition.
Published by Globes, Israel business news - www.globes-online.com - on February 20, 2012
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