US software company ServiceTitan (Nasdaq: TTAN) was floated on Nasdaq earlier this month, and since then its share price has soared by 41%, boosting its market cap to $9 billion. It now turns out that one successful flotation is enough to restore the color and optimism to the technology primary market, globally and in Israel.
A new survey by Poalim Tech and research company Meidata strengthens the forecast that 2025 will be a turnaround year. The survey, conducted among dozens of venture capital investors and leading investment banks, finds that at least five Israeli companies are expected to make IPOs in the coming year. “The success of ServiceTitan was extraordinary, especially considering that it’s in software service and not heavy technology,” says Greenfield Partners partner Raz Mangel. The fact that the company was floated at above the target price “signals a return of investor confidence,” he says.
This is not the only impressive success in the global IPO market in this past year. In March, media platform Reddit (NYSE: RDDT) was floated, and it has since shot up by 253%, to a market cap of $30 billion. Semiconductor company Astera Labs (Nasdaq: ALAB), one of whose founders is Israeli entrepreneur Avigdor Willenz, rose by 150% to a market cap of $20 billion since its IPO, also in March. “This year, we have seen about 35 substantial technology IPOs,” says Orel Levy, managing partner at ANEK Capital, a hedge fund that specializes in small and mid-size technology companies. In software alone there were 15 IPOs.
Huge flotations are planned for 2025 for companies like fintech giant Stripe. In Europe too, there is a palpable revival. Swedish fintech startup Klarna has announced its intention of making an IPO next year, and digital bank Revolut is considering an IPO as it enters the US market.
The natural path to the stock exchange
Israeli technology companies usually reach a flotation after an average of six fund raising rounds, sometimes over a decade, market sources say. In the past year, several Israeli companies have been identified as leading candidates for an IPO in the near future, among them VAST Data, a developer of advanced data storage solutions, which has been valued at $9.1 billion; Deel, which provides solutions for global payroll management; and fintech company Rapyd, which is expected to make an IPO at a valuation of at least $10 billion. Lightricks, which is known for its picture and video editing application, and Transmit Security, a developer of information security and identity verification solutions, are also on the list.
Trading platform eToro, has hired the services of investment bank Goldman Sachs to lead an IPO in the US. The company is expected to be floated at a valuation of $5 billion. During the boom period on the primary market, eToro took steps towards becoming listed though a SPAC merger at a valuation of $10.4 billion, later revised to $8.8 billion. In the end, the move was cancelled.
Cybersecurity company Cato Networks has appointed a banking team consisting of Barclays, JP Morgan, and Goldman Sachs for an IPO in New York. Navan (formerly TripActions), developer of a platform for managing business travel and expenses, is expected to make an IPO at a valuation of $8-10 billion. Fast delivery company Gopuff, founded by US-Israeli entrepreneurs, plans an IPO at a valuation of $10-15 billion.
Companies planning IPOs in the longer term are Lendbuzz, which provides vehicle purchase finance, and which is considering an IPO in late 2025 or early 2026, and Via, a developer of software systems for transport services, which is examining an IPO at the end of 2025, at a valuation of $2 billion.
Published by Globes, Israel business news – en.globes.co.il – on December 26, 2024.
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