Cellebrite becomes only Israeli co to exceed SPAC valuation

Cellebrite CEO Yossi Carmil credit: Geva Talmor
Cellebrite CEO Yossi Carmil credit: Geva Talmor

The Israeli digital intelligence company currently has a market cap of $2.3 billion.

Israeli digital intelligence company Cellebrite (Nasdaq: CLBT) was one of hundreds of companies that raised billions of dollars on Wall Street during the tech boom in 2021 through a SPAC merger.

Special Purpose Acquisition Companies (SPAC), raised money from the public without having any activities, with the aim of merging into an existing company within a specific period of time or returning the money to investors. In most cases valuations were bloated and many SPACs returned money to investors and those that were completed were at too-high a valuation.

Cellebrite was one of more than a dozen Israeli companies that completed a SPAC merger and until recently all of them were trading at valuations lower than the merger, with some of them having wiped off over 90% of their valuation. Last week, Cellebrite became the first Israeli company that had undergone a SPAC merger, to trade in excess of its debut valuation.

Cellebrite's digital intelligence products help transform digital information into evidence accepted in a court of law. These include solutions for retrieving information from mobile phones and other devices and solutions for analysis, investigation management and data management. Cellebrite says, "Thousands of law enforcement agencies and leading corporations use Cellebrite's digital investigative platform, which is changing the way customers collect, review, analyze and manage evidentiary information as part of law enforcement investigations."

Cellebrite completed its SPAC merger in August 2021, raising $370 million at a company valuation of $1.9 billion. Before the money was raised, human rights organizations and academics sent an open letter to the US Securities Exchange Commission asking them to prevent Cellebrite from becoming a publicly traded company because its products could violate human rights - something that Cellebrite denies.

Last week Cellebrite, managed by CEO Yossi Carmil, beat the analysts' forecast for 2023 with 20% revenue growth to $325 million. Cellebrite reported non-GAAP profit of $60.9 million in 2023 and EBITDA of $61.9 million compared with $25.9 million in 2022. The company's share price jumped 18% in two days of trading, giving the company a market cap of $2.3 billion, a rise of 190% from its low point 18 months ago.

Carmil told "Globes," "Cellebrite couldn't operate and receive credibility from the law enforcement agencies without very strong security. Our products do good by preventing crime and terrorism. Our market is healthy and it received a 'boost' from our exit and that of other companies for an IPO, by helping in the exposure of the field. We are a leader in the mobile field as a digital tool for obtaining evidence. Unfortunately, crime and terrorism also continue to grow, so there is good ground for growth."

Most of the company's clients are law enforcement agencies from the public sector, and according to Carmil, "Our clients have more budgets, but at any given moment they have too few personnel, and this gives room for 'disruptive' technology to make investigations more efficient."

Bank of America raised its recommendation for Cellebrite from "Neutral" to "Buy" and raised its price target from $9 to $12 - its current share price is already $11.40.

Published by Globes, Israel business news - en.globes.co.il - on February 19, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Cellebrite CEO Yossi Carmil credit: Geva Talmor
Cellebrite CEO Yossi Carmil credit: Geva Talmor
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