Start-up company AudioCodes of Yehud is planning an IPO on the New York stock exchange in May 1999. The company declined to either confirm or deny the report. "We do not make a habit of responding to such rumors," company marketing manager Oded Morag said, "we have no comment on the matter."
AudioCodes was set up in 1993 by Leon Bialik and Shabtai Adlersberg, founders of the New York traded DSP group. The company was initially financed by the founders, who now hold 43% of the shares. The DSP group holds 26%, and the Polaris, Chase, and Genesis funds of the Oppenheimer group hold 14%. The funds participated in the sole external fundraising held so far, in mid 1997, based on a company valuation of $20 million.
AudioCodes develops and markets voice compression chips and boards for information networks operating on IP (Internet Protocol). This is relatively new field, called Voice over IP, in which information networks are taking an increasing share of the communications market. This stems from the low cost involved in their set up and maintenance, and also from their efficiency, quality and smart features. AudioCodes chips enable voice compression of up to twelve times on data lines, thereby making more efficient use of the bandwidth.
The company’s direct customers, with whom it has OEM agreements, are companies that develop and market equipment for these networks for local and international telephony companies, a growing sector following the opening of the market to competition, and variously sized organizations.
Among the company’s customers are ClearNet, Netscape, Cisco (after it purchased Selsius), Motorola, Ascend (purchased by Lucent), VocalTec, Breezecom, Gilat, Tadiran and RAD Israel. Potential customers for compression products of the sort AudioCodes manufactures are heavy switching equipment manufacturers, such as Lucent, Nortel and Ericsson, which are currently developing solutions for the IP infrastructure.
Published by Israel's Business Arena February 4, 1999