Noam Lanir's Apply jumps on blockchain bandwagon

Noam Lanir

The company is setting up a venture in cooperation with third parties.

Technology investment company Apply Advanced Mobile Technologies Ltd. (TASE:APLY), controlled by entrepreneur Noam Lanir, is jumping on the blockchain bandwagon. Blockchain is the technology on which digital currencies such as Bitcoin are based. The powerful surge in the share prices of Natural Resource Holdings Ltd. (TASE:NRH) and Fantasy Network (TASE: FNTS) before those companies even began real activity in the segment, combined with the astounding rise in the price of bitcoins, apparently attracted the attention of Lanir, who knows a thing or two about catching a technology trend.

Applied reported to the Tel Aviv Stock Exchange (TASE) yesterday that it had signed an agreement in principle with third parties to establish a special purpose vehicle, "in the framework of which the parties will develop a platform for marketing, distributing, and referring customers to blockchain and digital currencies trading systems and platforms. The technology-based platform will operate with synergy, and will utilize Apply's online media and marketing apparatus, among other things."

Apply will hold 70% of the special purpose vehicle, and will provide a financing framework (owners' loans) under terms and conditions set forth in the agreement "subject to the needs of the activity and business viability." The agreement also establishes a mechanism and terms for dividing up the profits. The agreement further stipulates that "the company will be managed by a management entity composed of representatives of the entrepreneurs and the company, the entrepreneur (who will be appointed CEO), and through the providing of possible additional services by the company or third parties." Apply stated, "The goal of the venture is an additional application of the company's existing activity, and it does not intend to establish a trading arena for digital currencies or blockchain."

"Globes" reported last week that IDB Development, owned by Eduardo Elsztain, was investing $14.5 million in CLN, the digital currency of Israeli blockchain company Colu. This is the first investment by a major company in Israel in an initial coin offering (ICO).

Two months ago, Apply raised NIS 3 million from Alpha LTI, controlled by Gabi Dishi, Michael Weiss, and Yoel Geva, in a private placement of 1.6 million Apply shares constituting 10.2% of Apply's share capital (after the allocation) at NIS 1.92 per share. The private placement diluted Lanir's stake to 35.4% of Apply's capital, while Alpha increased its holdings to 15%. Other parties at interest in Apply are Ron Baron with 7.3% of the capital, CEO Oron Zell (6%), and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) (6.8%).

Apply began developing, marketing, distributing, and monetizing applications on mobile networks in 2013, and focused most of its resources in 2014-2015 on the development and distribution of a branded smart keyboard application for sports clubs and brands through the Kibo venture, which it owned jointly with WhiteSmoke Software Ltd. (TASE: WSMK). This activity, however, was unsuccessful, and the two companies restructured, streamlined, and cut back on Kibo's activity in 2016, in view of the venture's failure to generate revenue and its accumulation of losses. Apply then concentrated on providing marketing, advertising, and distribution services online and on mobile applications, and also considered "additional opportunities."

Published by Globes [online], Israel Business News - www.globes-online.com - on December 18, 2017

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