Israeli automatic software updating company JFrog has raised the price range it is asking for its shares in its upcoming Nasdaq Initial Public Offering (IPO). While it initially priced its shares in the $33-37 range, in a revised prospectus published today the company has raised the range to $39-$41. This reflects a company valuation of between $3.5 billion and $3.7 billion compared with $3 billion and $3.3 billion previously.
If the share price is fixed at the mid-range of $40 then JFrog will raise $292 million rising to $357 million if the underwriters exercise their full rights to buy options.
The IPO is set to take place on Wednesday include a ther sale of shares by the company's three founders and two of its investors. If the share price is $40 then the founders will sell shares for $57.5 million. CEO Shlomi Ben Haim will sell shares for $25.5 million, CTO Yoav Landman will sell shares for $20 million, and chief data scientist Fred Simon will sell shares for $12 million.
After the IPO, Ben Haim will remain with a 5.8% stake (worth $207 million at $40 per share), Landman will have an 8.9% stake (worth $315 million) and Simon will have a 6.4% stake (worth $226 million). Scale Ventures will sell shares for $43.4 million and Qumra Capital will sell shares for $41.8 million.
JFrog, allows companies to regularly update all their software without interrupting ongoing work.
Lead underwriters for the Nasdaq IPO are Morgan Stanley, J.P. Morgan, and Bank of America Securities while co-book-running managers are Piper Sandler, KeyBanc Capital Market, Stifel, Nicolaus & Co., William Blair, Oppenheimer, and Needham. JFrog will trade under the FROG ticker.
Other shareholders who are preferring not to sale in the IPO are Gemini (14.3%), Sapphire (9%), Insight Partners (8.9%) and Dell's investment fund (8.5%).
According to JFrog's prospectus, revenue grew 65% to $105 million in 2019, and revenue in the first half of 2020 was $69 million, up 50% from the corresponding period of 2019. JFrog is still not profitable but its losses have been narrowing - from $26 million in 2018 to $5.4 million in 2019 and just $426,000 in the first half of 2020 compared with $2.1 million in the first half of 2019.
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