MainSoft is planning to raise $5-8 million in a private placement, on the basis of a $42 million company valuation before money. According to estimates, the placement will close during the second quarter of the year.
It is estimated that $2 million of the fundraising round have already been guaranteed. Underwriters are Israeli company Solid and French company Paribas.
MainSoft is a private US company founded in 1992 and located in Sunnyvale, California. The company currently has an R&D center in Israel, and half of its eighty-two employees are R&D workers.
MainSoft engages in development and marketing of products that convert operating software from Microsoft’s Windows NT environment to UNIX. Particularly prominent among the company’s customers are Microsoft, CA and Cadence.
The company’s largest revenues come from Microsoft, and according to estimates, the company’s sales last year to Microsoft amounted to $2.7 million, 30% of total. MainSoft’s sales to CA last year are estimated at $1.2 million, while transactions with Cadence totaled an estimated $1.3 million.
According to estimates, the company’s total revenues for the year ended in June 1998 amounted to $9 million, a 200% rise compared to revenues in the previous year, which amounted to only $3 million. MainSoft’s revenues in 1999 are expected to reach $18 million, and $36 million in the year 2000.
MainSoft closed 1998 with a net loss of $5.4 million. Estimates say the company will move to a net profit (of $700,000) for the first time this year (MainSoft’s financial reporting year ends in June 1999), and show a considerably higher net profit of $5.5 million in 2000.
On the eve of the fundraising round, the major shareholders are the American founders, who hold 15% of company shares, Shrem-Kelner-Pudim, which also holds 15% of shares, and the Edgar fund, with 13% of MainSoft’s shares.
Additional shareholders are Applicom, of the Formula group, which holds 9% of shares, Swiss bank BHF, also with 9%, Clal Venture Capital, with 8%, and the Sadot R&D fund, also with 8%.
A month ago, MainSoft completed a $2 million private placement, on the basis of a $27 million company valuation before money. The company valuation in the current round is significantly higher, at $42 million.
Published by Israel's Business Arena March 23, 1999