Israeli fintech co Gefen raises A$25m in Australian IPO

Australian Securities Exchange ASX  credit: Shutterstock

The company develops digital tools and services for insurance, finance and real estate companies.

After a dry period of a several months, another IPO of an Israeli company on the Australian Securities Exchange took place yesterday. Gefen International A.I. Limited raised A$25 million (NIS 60 million) at a valuation of A$128 million (NIS 308 million). According to the company's announcement, the offering was over-subscribed. "The IPO was underpinned by a high-quality shareholder base which included institutional and retail investors, along with the strong support of existing Gefen shareholders including Regal Funds Management, Ellerston Capital and Perennial," the announcement said.

Nevertheless, at the opening of trading, the company's share price fell, and it closed its first session down 17% from A$1 to A$0.83.

Tel Aviv-based Gefen was founded in 2016 by David Nash, Elad Daniel, and Orni Daniel. It develops digital tools and services for insurance, finance and real estate companies. It appeals particularly to customers in industries with a heavy burden of regulation, offering them solutions for content creation, marketing, messaging, sales, and so on.

In effect, Gefen's platform is a digital trading arena in which highly regulated enterprises can use agents to sell complex products to end customers. Gefen's revenue derives from the sale of licenses to use its platform, and from a 30% commission from agents that close deals through it.

The company expects that in the future it will also generate revenue form advertising solutions that it will offer.

In the first half of 2021, the company grew in all substantial measures. The number of its end customers grew by 105% to some 123,000, and the number of transaction carried out on its platform grew 182% to 2.4 million. Among its customers are two major insurance companies, Generali and Manulife. The company has a collaboration agreement with Israeli technology company Sapiens International NV (Nasdaq: SPNS; TASE: SPNS), which provides solutions to the insurance industry and is traded on Nasdaq at a a market cap of $1.4 billion.

In 2020, Gefen's revenue grew 26.5% to A$16.4 million. A sharp rise in operating expenses widened its operating loss considerably, to A$27.7 million, and the bottom line was a net loss of A$19.8 million. A going concern qualification was appended to the financial statements.

According to the company's prospectus, the coronavirus pandemic served to accelerate the adoption of its solutions.

Gefen co-founder and co-CEO Orni Daniel said, "We are very pleased with the overwhelmingly positive response our IPO has received. Gefen gives investors access to a unique opportunity that has significant potential for growth across global agent-based industries. With the funds raised in the IPO, we will be able to implement additional upgrades to our platform and invest in the marketing and growth initiatives that will help us continue to scale."

The previous IPO of an Israeli company on the Australian Securities Exchange was that of protein drink company NGS in November 2020.

Gefen was advised in the IPO by accounting firm BDO and by Adv. Anna Moshe of law firm Pearl Cohen Zedek Latzer Baratz.

Published by Globes, Israel business news - en.globes.co.il - on July 22, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Australian Securities Exchange ASX  credit: Shutterstock
Australian Securities Exchange ASX credit: Shutterstock
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