Venture capital firm Insight secures billions from Israel’s Monday.com and WalkMe IPOs
Monday.com celebrates its initial public offering on the Nasdaq on June 10, 2021.
In April, Insight Partners’ Jeff Horing took a flight to Israel for a breakfast with the tech CEOs. It was also the occasion to visit the first international office of his firm, opened less than two years ago.
Now the CEOs of two of those companies are visiting him in New York. They’re actually ringing the Nasdaq bell, as high-growth Israeli companies line up to strike public markets.
Collaboration-as-a-service (SaaS) software provider Monday.com held its IPO last week and closed with a market cap of $ 8.2 billion on Friday. This week, Israeli software company WalkMe, whose technology is designed to simplify business software and applications, is expected to go public with a valuation of up to $ 2.6 billion.
Insight is the biggest investor in both. The company owns a 43% stake in Monday.com and controls 32% of WalkMe. His combined ownership in the two companies is currently worth around $ 3.9 billion.
âFor a long time, Israel has been a hub for start-ups, a hive of activity,â Horing wrote in an email, responding to written questions. “But these startups are growing successfully at a faster rate.”
Money is pouring into Israeli technology. The country’s start-ups raised $ 5.37 billion in the first quarter, more than double the amount of the previous year and 89% more than in the fourth quarter, which was a record period, according to a report by ‘IVC and the Meitar law firm.
Herzliya-based game developer Playtika went public in January and has a market capitalization of $ 10.6 billion, making it the fourth publicly traded tech company in Israel, according to FactSet. Monday.com ranks fifth and WalkMe is poised to make the top 10.
For Insight, the launch of an Israeli operation in late 2019 marked the company’s first office opening outside the United States since its founding in 1995. But Insight has been investing in and around Tel Aviv for more than two decades.
Horing said the company made its first deal in Israel in 2000. He pointed out that Enigma, a software developer for manufacturers, and Shunra, a network virtualization company acquired by Hewlett-Packard, were the first two. investments.
âI have always loved visiting Israel and have many memories in small market restaurants, eating amazing food, chatting for hours about different SaaS technologies and strategies,â Horing said. âMy team and I have spent countless hours traveling back and forth to Israel, often spending weeks both getting to know entrepreneurs and working alongside our portfolio companies. “
Prior to Monday.com, Insight’s flagship investment had been in website builder software company Wix, which went public in 2013. Insight co-led a $ 40 million funding round in 2011 and held a 12% stake at the time of the IPO.
Wix’s share price has since climbed 17-fold, giving the company a market cap of $ 15 billion, just behind Check Point Software among Israeli tech companies.
âWix has been a fundamental investment for Insight in Israel,â said Horing. Wix co-founder Avishai Abrahami is also on Monday.com’s board of directors. Along with Abrahami and Nir Zohar, Wix’s director of operations, “we have co-invested in many Israeli deals over the years,” said Horing.
Acquisition of the portfolio of an Israeli company
The most glaring detail in Monday.com’s cap table is the size of Insight’s stake.
Typically, when a venture-backed company goes public with a multi-billion dollar valuation, the primary company owns no more than 30% of the outstanding shares, often much less.
Insight took a unique approach to reach 43%. In February 2019, seven months before its Tel Aviv office opened, Insight bought the majority of a portfolio of funds held by an Israeli company called Genesis Partners, whose partners were leaving for other firms.
Within this fund, which closed in 2009, Genesis had invested in Monday.com’s seed and Series A funding rounds. Insight first arrived as part of the $ 25 million Series B in 2017.
After acquiring the contents of the Genesis fund, Insight was able to merge the holdings of the two companies, thus constituting a stake worth $ 3.1 billion. Genesis was also an early investor in two other companies backed by Insight: online music learning company JoyTunes and business intelligence company Sisense.
Monday.com co-founder and co-CEO Roy Mann told CNBC that Insight is harnessing a big change in Israeli technology.
âThey had a very strong belief in Israel and the Israeli ecosystem,â Mann said in an interview after the IPO. “The whole industry has matured to a level where entrepreneurs want to build big companies and keep them for a long time. Insight recognized this early on and really went back and forth with a lot of amazing Israeli companies.”
Horing joined co-founders Mann and Eran Zinman to ring the Nasdaq opening bell on Thursday. The company also had 250 employees who came from cities across the United States.
Horing will have the opportunity to do it again this week for the WalkMe IPO. In 2017, Insight led a $ 75 million investment in WalkMe. Continuing through two more rounds of fundraising, Insight built a 32% stake worth $ 750 million in the top of WalkMe’s IPO lineup.
Horing said Insight now has 80 ‘operational experts’ in Israel working with portfolio companies and has expanded to Tel Aviv to take over the space once occupied by JFrog, which went public on Nasdaq last year. .
As for what Horing finds most exciting coming out of Israel these days, he said there are plenty of opportunities to make the money work.
“Israel is in full swing,” he said. “Of course, cyber is a strong industry, but it is much broader for a large group of SaaS, infrastructure, fintech, games and advertising technology.”
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