An innovative and first-of-its-kind investment tool in Israel, which was issued on the Tel Aviv Stock Exchange, allows the Israeli public to be exposed to the leading technology companies in Israel: The Big-tech 50 R&D partnership completed an initial public offering last Wednesday, in which it raised Institutional investors have about NIS 85 million in order to build a portfolio of the 50 largest private technology companies in Israel, similar to an index.
Big-Tech 50 R&D, as it is called, plans to produce an index of the 50 largest private technology companies in Israel and allow investment in them before they are issued to the public (Pre IPO) or sold to international giants. Target companies will be selected according to the following criteria: The investment in it will be at least $ 250 million; the company has been in existence for at least 3 years; the company has invested at least one venture capital fund; the company generates ARR (Annual recurring revenue) of at least $ 10 million and shows growth in the last three years. The companies that meet the criteria is over 30% per year, far beyond any other tradable technological index.
Big-Tech 50 R&D already has signed deals to buy shares in 4 companies: IronSource, Via, Payoneer, Fundbox, in addition to 5 deals in various signing stages. The largest investment, at the moment, is $ 2 million (NIS 7 million). ) Via, which has developed a platform for collaborative travel, and was valued last March at $ 2.3 billion.
Big-Tech 50 R&D is led by entrepreneurs and managers with extensive experience in the Israeli high-tech and venture capital markets: Arik Cherniak, chairman of Supersonic, which was sold to the Israeli Ironsource for about $ 200 million five years ago and currently serves as chairman of the partnership, serves as chairman. As managing partner in the Israeli venture capital fund Axon Ventures; Yochai Zaid, former CEO of the ISP Finance Group, Deputy CEO of Get Israel (formerly Ceremonial Divorce) and consultant at the international consulting firm McKinsey, serves as the CEO of the partnership; More than 30 years in the Israeli capital market.
Institutional entities participated in the offering. The offering was offered through Discount Capital Underwriting and Valio Base Underwriting and the issuer of the offering is Am. enough. Premium. The offering was accompanied by attorneys Itai Berfman and Adi Ron from the firm of Dr. Zeev Hollander.
Yochai Zaid, CEO of Big-Tech 50 sent a message to FUNDER: “The results of the successful IPO show great confidence in the vision we have presented. The money raised will help us invest in other private technology companies, ‘make’ them accessible to the market, with the aim of creating additional value for investors. Shareholders in technology companies worth over $ 250 million, “.
The investments of Big Tech 50 R&D in the target companies will be made mainly by purchasing existing shares, enterprises, angels, first employees and first investors in the target companies, as private secondary funds do. These funds generate liquidity for shareholders in private high-tech companies. Who want or need to liquidate some of their holdings even before the company is issued or sold.
The goal of Big-Tech 50 R&D is to enable the general investing public to be exposed to the great successes of Israeli high-tech. The technology sector, especially in the last five years, shows a significant excess return compared to other sectors, and this trend continues The core of many technology companies, for example, an ETF on the Nasdaq has shown a return of almost 180% in the last five years, while an ETF on the S & P500 has returned 80%.
The Israeli high-tech industry is considered one of the largest and most successful in the world, with in recent years more and more venture capital funds’ money being invested in the mature companies, in the late stage stages. According to IVC and Statista’s databases, last year the rate of investments in Israeli high-tech companies in the Late Stage stages was 86% of total investments, compared with 67% in 2013 and 71% in 2016.
Big-Tech 50 R&D, as mentioned, adapts itself to this trend and in the process of building a portfolio of the 50 largest private high-tech companies in Israel that are already in the Late Stage stages. Companies that meet these definitions are companies such as: Tabula, Monday, WalkMe, Snyk and more.
Big-Tech 50 R&D raised NIS 85 million for an investment in about 15 target companies, with initially each size up to $ 2 million. Later, the size of the investment will increase to $ 5 million with the intention of reaching an investment in 50 companies with a total value of About a billion shekels.
The index of Big-Tech 50 R&D, ie the target companies’ portfolio, will be managed so that the distribution between the companies is in a uniform aspiration and the value of holding in a single company does not exceed 15% of the portfolio. Because the partnership’s portfolio companies are private companies : Sale of the Company; Initial issue of the Company (after the end of the lock-in period); Sale of the shares held to another party.