Israeli freight booking and payment platform Freightos announced today that it has entered into a definitive merger agreement with the Gesher 1 Acquisition Corp. (Nasdaq: GIAC) special acquisition purpose company (SPAC) at an enterprise value of $435 million. The announcement ends a long period in which SPAC mergers have been frozen due to the sharp falls in tech companies on Wall Street.
Gesher 1 is a blank check company that was founded by US Jewish businessman and Varana Capital partner Ezra Gardner, High House Investments partner Omri Cherni and Chris Coward, formerly of UBS and Point72, to target a merger with a tech company.
As part of the SPAC merger, Freightos was also raise $80 million in capital commitments including $10 million from Qatar Airways.
Freightos is a Jerusalem based startup, founded by CEO Zvi Schreiber in 2012, which deals with freight shipping. The company, which also has offices in Barcelona, has developed a system for automatic pricing of shipping freight by sea, whose value has risen over the past few years due to the supply chain crisis, which stems in part from the lack of shipping containers, ships and truck drivers. The company serves as a digital market allowing the comparison of shipping prices, ordering shipping services and tracking and managing their progress.
Schreiber told "Bloomberg" that the company has estimated annual revenue of about $21 million and despite the problematic timing on the market, he feels that the market believes in his vision that the supply chain is not sufficiently flexible or innovative. Schreiber is the brother of Lemonade cofounder and CEO Daniel Schreiber and is a serial entrepreneur who has previously founded companies like Ghost and Lightec.
According to PitchBook, Freightos has raised $105 million from investors including FedEx, Qatar Airways, SGX, Aleph, Mor VC, and Booking Holdings chairman Bob Mylod. Gesher 1 raised $115 million last October and the merger with Freightos is expected to be completed in the second half of 2022.
Gesher 1 CEO Gardner told "Globes," "We sought five criteria in our acquisaition target. An exceptional management team with a record of meeting targets and creating value, a business looking to grow big with scalability, a market leader - Freightos is three times bigger than the pricing of its closest rival, a business with a model of large growth and ability to look ahead, and also a company that can go onto the public market in the current situation - and even has a good reason to go public now of all times."
He added, "The market understands the supply chain disruptions that must be corrected. The supply chain issue is always reported as part of the global trade war, a ship that goes aground in the Suez Canal and the like - but the truth is that there is always something disrupting the supply chain and the response must be dynamic. If shipping is cancelled because some canal is closed, how do you respond dynamically? Only through digitalization and not faxes." He continued that Freightos also offers a solution to calculating CO2 emissions.
Freightos was represented in the SPAC process by the DLA Piper law firm.
Published by Globes, Israel business news - en.globes.co.il - on June 1, 2022.
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