The shares of Pagaya Technologies will begin trading on Nasdaq today with the PGY ticker after the Israeli fintech company completed its merger with US SPAC company EJF Acquisition Corp.
The merger gives Pagaya a valuation of $8.5 billion, the second largest SPAC merger ever completed by an Israeli company and the valuation was not reduced by the recent turmoil on capital markets. However, although no data has been provided, there was probably a high proportion of EJF shareholders who sold their stakes before the merger was completed because the PIPE (private investment public equity) investment, which accompanies the merger was increased to $350 million, indicating that the amount received from the SPAC itself was negligible.
Pagaya was founded in 2016 by CEO Gal Krubiner, CRO Yahav Yulzari, and CTO Avital Pardo. Pagaya provides P2P credit and loans through a platform based on machine learning technology.
Krubiner told "Globes" that bearing in mind the turmoil in the markets he feels "great pride after work that would be impossible to explain but there is now genuine happiness at the success in these complicated times."
Krubiner recounts that the company was founded to give Americans the chance to receive credit and in practice it allows the provision of additional credit from investors and banks. "We are behind the scenes very strongly with Israeli technology," he says, "It has been a journey of six years that has been boosted over the past two years with large growth. The company is profitable, producing cash, large revenues and a lot of value."
So far 100% of Israeli tech companies that held SPAC mergers have seen their valuation fall sharply. What do you expect your share price to do?
We don't deal with that. Unfortunately or fortunately we don't control the share price. It's important to understand that the issue is the long term - what will be the performance in five-years, for example."
So where will you be in five years?
"We will be one of the most significant institutions in the field of end-to-end solutions for banks. There could be complete revolutions in huge industries like underwriting and real estate and that will be big news for the US consumer and all with Israeli technology. It's a great source of pride."
In the current economic situation, people need more credit. As a result is there more demand for your solutions?
"That's exactly the point. Banks and other institutions are currently trying to find solutions and responses for customers and the need to turn to Pagaya has grown."
Published by Globes, Israel business news - en.globes.co.il - on June 23, 2022.
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