At the end of November 2017, monday.com was selected as Globes' Most Promising Startup for that year. At the time, monday was a small 80-employee company selling enterprise task management software to 16,000 paying customers. Just a few weeks before the selection, the company had changed its name from Dapulse to monday.com.
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||2018 financing round
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||2021 financing round
||2020 financing round
Four years have passed, and monday.com is now one of Israel's most valuable companies. monday.com went public last June at a $6.8 billion valuation and its market cap has since climbed to about $12 billion. monday.com is no longer just a task management software developer and provider, but is trying to position its offering as a comprehensive operating system for organizations, including functionalities for managing customer relationships and a tool for creating Google Docs-style collaborative documents. At the end of March this year, monday.com had 800 employees, and it serves 130,000 enterprises worldwide.
This week, we will publish the Globes' list of the 10 Most Promising Startups of 2021. This is the 16th year that Globes has published the list, selected by dozens of leading venture capital funds. In advance of this event, we went back to see what’s happened to some of the startups that ranked top of the list in the last decade.
Puls returns with a handful of improvements
monday.com is, without a doubt, one of the startups that has fulfilled its potential but it’s not the only one. Fiverr was also a relatively small company of 50 employees when it was selected first among the most promising startups of 2012. Fiverr started out as a marketplace for five-dollar freelance services ranging from web design to narration, but even then, the platform allowed for a broader range of pricing. Fiverr went public in 2019 at a $650 million valuation and has since soared to a market cap of about $4.5 billion, boosted by the freelance economy boom of the Covid-19 pandemic. As of 2020, Fiverr had 545 employees and 3.4 million active buyers.
A total of four of Globes' 10 Most Promising Startups of the last decade have gone public, not at all a bad statistic. 2016 winner WalkMe, which simplifies the website and software user experience, and web content recommendation company Outbrain, the 2011winner, were floated on Wall Street this year, although both have experienced a significant drop in market cap since becoming listed. A fifth company, 2014 winner Gett, is expected to go public on Nasdaq via a $1.1 billion SPAC merger, a relatively disappointing value for the ground transportation management company, which has raised about $860 million to date and has previously tried to compete head-to-head with Uber.
Today’s Israeli entrepreneurs dream about IPOs the same way they once dreamed about making exits. Emblematic of this change is the fact that only one of the last 10 Most Promising Startups has been sold: family tree and genetic testing company MyHeritage, which was acquired this year at a valuation of about $600 million.
Alongside these successes, there are also those that made the list but have not yet fulfilled their potential. Two examples are 2018’s winner Puls, and 2015’s StoreDot. From the outset, both did not fit the classic Israeli high-tech model that focuses on B2B developments, selling software to enterprise customers. The difficulties and delays they have experienced reflect the risk and complexity of other business models such as B2C selling to consumers or deep-tech development.
Puls received almost $100 million from top-tier Israeli and foreign funds like Sequoia Capital, Temasek, Viola Ventures and Red Dot Capital Partners. This funding was supposed to enable it to fulfill its goal of sending a technician to any home in the US within 60 minutes, whether to replace a broken screen on a smartphone or hang a TV on the wall. Upon being picked to the Top 10 in 2018, Puls CEO and co-founder Itai Hirsch said his goal was to build an international company with representatives around the world serving millions of customers.
But the Puls business model has proven to be problematic, or at least very expensive to implement. A major problem was that the one-off relationship between the customer and the company: customers hired a technician through Puls one time only, and then vanished. This forced Puls to invest constantly in acquiring new customers. Puls also experienced several leadership changes, with founding CEO Eyal Ronen leaving a month before the company was named to the 2018 list. After that, Hirsch also resigned (he has since set up legal software startup Marble Law), and was replaced by an American CEO.
Having already shrunk to 35 employees, Puls is now trying to raise a second round as a completely new company with various investors and management headed by CEO Gabi Peles. "We want to take advantage of the customer's interaction with the technician to sell insurance for a monthly fee and create a permanent relationship, so that the next time they need something repaired, they’ll contact us," Peles explains. The promise of sending a technician within 60 minutes has been replaced with a promise to send one by the next business day.
StoreDot’s battery hasn’t yet found its way to consumers
Over the years, StoreDot has also made changes to its business model. The company was founded in 2012 with the aim of developing a lithium battery for smartphones that would charge within half a minute. When it was selected as the Most Promising Startup of 2015, StoreDot had already shifted its focus to electric car batteries, but still continued to develop its smartphone product. StoreDot has also dealt in batteries for drones, motorcycles, electric scooters and power tools, and only two years ago made the decision to jettison all these in favor of its vehicle offering.
In an interview upon the company winning in 2015, Dr. Doron Myersdorf, CEO and co-founder of StoreDot, estimated that electric vehicle batteries able to be fully charged in five minutes would be on the market in 2020-2021. This target has come and gone, and meanwhile StoreDot has not yet launched a commercial product. Myersdorf now says that StoreDot batteries with 10-minute full charge capability will be available in the second half of 2024, and that batteries with a new technology enabling full charging in just three minutes will be available in 2028. StoreDot's last funding round was in 2018, and it is currently trying to raise additional funds.
Did the fact that it took a while for the company to find its focus delay these developments? Myersdorf does not think so. "The fact that we went through development of small batteries was valuable for our understanding the chemistry and structure of a car battery," he says. "Today, we have over 100 patents and are considered the world leaders in the field of extreme fast-charging batteries. Developments in the automotive sector take years, and I was never looking to make a quick exit. I want to make a change and solve a problem for the good of the world."
Published by Globes, Israel business news - en.globes.co.il - on December 6, 2021.
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