It's not just young technology companies that are knocking on the doors of the Tel Aviv Stock Exchange (TASE), but also older companies that are experiencing difficulty in financing continued activity and are prepared to reduce their valuations substantially. This appears to be the case with Airobotics, which, a few months after "Globes" revealed its intention of making a public offering, has filed an initial draft prospectus with the TASE, from which it emerges that the company, which has developed an automated drone for gathering and processing information, has burned the huge sum of $122 million since it was founded and has less than $1 million left.
Airobotics is believed to be seeking to raise $20 million at a pre-money valuation of $70 million, less than a third of the $240 million valuation at which it raised money privately less than three years ago. The flotation will be led by Leumi Partners and Discount Capital. The proceeds of the offering are meant to finance the company's day to day activity in accordance with its goals and business strategy, which include expansion of its activity and investment in research and development.
The company's potential customers are urban police and inspection authorities, municipalities, and various industries such as gas, mining, oil, ports, and security, as well as major technology companies interested in the large quantities of data that the system gathers. Airobotics has activity in Israel, the US, and Singapore.
Airobotics employs 81 people at its offices in Petah Tikva and overseas. It was founded in 2014 by Ran Krauss (president), and Meir Kliner (CEO), and since then has had four large fund-raising rounds, the latest in October 2018 when it raised $40 million, as mentioned at a post-money valuation of $240 million. Among the company's shareholders are Pavilion Capital, a private equity unit of Temasek Holdings of Singapore (37%), OurCrowd (25%), Alpha Intelligence (16%), and BRV Aster Fund (8%).
The company's financials paint a far from enthralling picture, with revenue of just $1.6 million in 2020, 33% less than in 2019, and a loss of $14.3 million following a loss of $33 million in 2019. Airobotics explains last year's decline in revenue mainly by the cessation of its activity in Australia.
In addition to the loss, Airobotics' auditors draw attention to the negative cash flow from ordinary activity of $8.8 million last year, a deficit on shareholders' equity of $5 million, and a deficit on working capital. They state that the ability of the company to pay its liabilities depends on fulfilment of the management and board's plans, which include a streamlining and downsizing program as necessary.
In its draft prospectus, the company reports an agreement reached last month with several investors whereby they will inject $4.4 million into it at a discount of 25% on a fund raising to be held, including a public offering.
Published by Globes, Israel business news - en.globes.co.il - on June 24, 2021
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