Roots, Parazero raise money in Australia

Boaz Wachtel  / Photo: Jonathan Bloom , Globes

ParaZero and Roots Sustainable Agricultural Technologies held private placements at prices far below the prices in their IPOS and at substantial discounts on the market prices of their shares.

While the pace of IPOs by Israeli companies on the Australian Securities Exchange (ASX) has slowed in recent months, Israeli companies already listed there are enjoying access to the market and the ability to raise capital there in secondary offerings. Israeli companies have carried out three financing rounds in recent days: after water treatment company Fluence completed a round of A$36 million (NIS 86.4 million), two smaller companies from Israel held offerings: agri-tech company Roots Sustainable Agricultural Technologies raised A$820,000 (nearly NIS 2 million) and drones technology company ParaZero Drone Safety Solutions raised A$642,000 (just over NIS 1.5 million).

Both Roots and ParaZero raised money in private placements to investment institutions, and both were at prices substantially lower than the share prices in their IPOs on the ASX. ParaZero raised money at A$0.06 per share, compared with A$0.20 in its IPO in 2018. The real price in the current offering is actually lower, because the investors in the current round also received an option to buy shares proportionately to their holdings. The share price on the ASX before the financing round was A$0.07, but trading in the share was halted in the final weeks before the round.

The share price in Roots' current round was A$0.043, compared with A$0.20 in its IPO in late 2017. This price is a 15% discount on the average share price during the 30 days preceding the private placement. Roots is also planning to grant investors options for exercise in the future, but this is subject to approval by a shareholders' meeting.

ParaZero, whose market cap is A$8.2 million, has developed parachute-based technology that automatically detects malfunctions and lands the drones safely. The company, founded in 2014 by Amir Tsaliah and Ran Krauss, is managed by CEO Brig. Gen. (res.) Eden Attias, a pilot in the Israel air force reserves. The company says that it will use the money raised to assemble an inventory of products and for working capital.

Roots, whose market cap is A$5.5 million, was founded in 2012 by CEO Dr. Sharon Devir and Ale Yarok (Green Leaf) Party founder Boaz Wachtel. Roots has developed a system for heating or cooling the roots of crops that uses little energy. Another technology developed by the company makes it possible to irrigate crops using condensation only. The company's share price is rather volatile. Reports by Roots during a period of technological progress or entering hot markets, such as the cannabis and meat substitutes markets, resulted in a jump in the company's share price, followed later by steep declines.

Over 20 Israeli companies in various technology sectors are currently listed on the ASX. The latest company to join the ASX is AppsVillage, a provider of software as a service (SaaS) solutions for small businesses. AppsVillage held its IPO last August at a NIS 23 million valuation. The largest Israeli companies on the ASX are Audio Pixels, a developer of high-performance loudspeakers, with a market cap of A$495 million; Fluence (A$279 million); and fintech company Splitit (A$275 million).

Published by Globes, Israel business news - en.globes.co.il - on October 27, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Boaz Wachtel  / Photo: Jonathan Bloom , Globes
Boaz Wachtel / Photo: Jonathan Bloom , Globes
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