GuruNet, which provides integrated online reference information on the Internet, has raised $11.75 million through an issue of 2,350,000 shares at an initial public offering price of $5.00 per share. The shares will be traded on the American Stock Exchange under the symbol GRU.
In addition, the underwriters have been granted an option to purchase up to an additional 352,500 shares from GuruNet, to cover overallotments. The managing underwriters of the offering are Maxim Group LLC. and EarlyBird Capital, Inc.
GuruNet has earmarked $3.16 million of the money raised for repayment of debt; $1.9 million for development of its marketing and sales network; $1.7 million for research and development; $1 million for support; and $1.5 million for working capital.
In the first six months of this year, GuruNet lost $3.5 million on revenue of $46 thousand, compared with a loss of $1.43 million on revenue of $8 thousand in the corresponding period last year. The company has a deficit of $1.2 million. It has $2 million cash left from the huge fund raising round totaling $28 million that it carried out before the bursting of the high tech bubble in 2000, and from a $5 million round held in 2003. Since it was founded in 1998, the company has raised $39 million in three financing rounds.
GuruNet's main shareholders include Highland Capital Partners, which owned 21.8% of the company before the IPO, and whose holding has been diluted to 8.2%; Israel Seed Partners, which held 11.4%, and has been diluted to 4.4%; Dawntreader Ventures, which held 7% and whose holding is now diluted to 2.7%; and Morton Meyerson; who held 11% before the IPO, and whose holding has been diluted to 4.3%. Yossi Vardi also has a small number of shares in the company. No offer for sale was made alongside the IPO, and the aggregate holdings of the employees have been diluted from 45% to 17.2%.
GuruNet was founded by Robert Rosenschein, who is chairman and CEO of the company, in 1999. It has offices in Wesley, New York, and in the Jerusalem Technology Park. The company changed its name to Atomica, and then back to GuruNet.
Published by Globes [online] - www.globes.co.il - on October 13, 2004