Israel’s Cappitech acquired by IHS Markit
Cappitech’s 40 employees will stay on as a business unit within IHS Markit’s financial services business line
The Israel-based company that was founded in 2013 has raised $4 million to date. Both sides declined to comment on the acquisition’s price tag, but according to a person who spoke to Calcalist on condition of anonymity it is in the tens of millions of dollars range. IHS Markit is traded at a valuation of $35 billion.
Cappitech is a privately owned company with headquarters in Herzliya headed by CEO and founder Ronen Kertis. Cappitech has trailblazed its way to success with its innovative, multiple award-winning products that were launched in 2016 and is revolutionizing the way financial institutions meet their regulatory reporting obligations.
Cappitech raised just one round of financing of $4 million in 2018 led by 83North and several private investors. Since that funding round, Cappitech demonstrated rapid growth and has grown its customer base fivefold with revenues increasing tenfold. The Cappitech team, comprised of over 40 staff, most of which are based in Israel, will remain in place as a business unit within IHS Markit’s financial services business line and will run the combined business of Cappitech and IHS Markit in the regulatory reporting space.
“Regulatory reporting demands will continue to grow rapidly around the globe and customers are looking for a reliable, frictionless, and cost-effective way to comply with requirements across jurisdictions,” said Pierre Khemdoudi, Managing Director Global Equities at IHS Markit. “Cappitech’s platform complements our existing offering, enabling us to provide the most comprehensive and scalable integrated financial regulatory service to customers.”
In 2019, IHS Markit selected Cappitech’s technology to power their SFTR solution which today is used by some of the largest financial institutions in the world. Capitalizing on the already established working relationship and integration of technologies, this latest move further expands IHS Markit’s reporting offering through a unified monitoring dashboard. With the full integration of Cappitech’s technology and client base, the combined business will provide the industry with an extensive reporting solution.
“As a well-known technology provider and thought leader in the regulatory reporting space, we are excited to work with a company that shares our commitment to providing best-of-breed regulatory reporting solutions, and we are confident that our mutual SFTR successes will make executing the next growth phase seamless,” said Cappitech’s Kertis. “I want to thank Cappitech’s board and employees for their tremendous contribution, dedication, and innovation in helping to achieve this great milestone.”
In an interview with Calcalist, Kertis said that the deal was “a good exit for the company and its investors are very pleased. We have been working with the buyer as a client for the past two years. They got to know our capabilities and realized we were a perfect match, with our technology and clients and them being a giant company valued in the billions. Our center here will continue operating as usual. We will connect to their business line and lead the joint enterprise.”
“It is a serious company that carries out significant due diligence in a process that took place over several months. It seems to me that the Covid-19 pandemic actually helped with the process because things that would have in the past required a meeting, were able to be carried out over video calls,” Kertis added. There is an advantage to sitting in a room together, but in the end, the pandemic didn’t change anything significantly.”
“We raised very little money and most of it is still in savings. We strived to generate income from day one. We are not trying to invent a new business, but rather are solving a well known existing problem. When we received the offer, we were reporting handsome revenues already. Our company has a vision of leading the industry and it was clear to us that joining forces with IHS will help us do so quickly and easily,” Kertis concluded.
