For enterprise SaaS in the TASE, the time is now
Gal Gitter outlines three main reasons why Glassbox chose to trailblaze a "second" path for growth-stage Israeli software companies
The last few years have been, for the most part, phenomenal for enterprise software startups. High-growth SaaS startups will typically have a north star that they will follow en route to market ubiquity: A successful IPO in a U.S index, as we have seen from a growing list of Israeli software companies, most recently JFROG, SimilarWeb, and others, commonly done at very high revenue multiples. During companies' growth stages, typically seen when the company already has a recurring go-to-market model and is either at or very close to product-market fit (usually at ~$30-$70 million of annually recurring revenue) – they will typically raise one or two large private rounds from growth investors, usually ranging from $50-200 million. This provides the companies with the required "juice" to further scale the business so that they are large and stable enough before they go public. In nearly all of the cases, this has been the only path that high-growth SaaS startups have taken. However, our portfolio company Glassbox has chosen a different path – going public on the Tel Aviv Stock Exchange (“TASE”) this week, in lieu of raising that growth round. You may be asking, why?
Third, and perhaps most importantly, we very strongly believe that there has been a big missing piece from the groundbreaking success of Israeli innovation and growing SaaS dominance: The Israeli public. For the most part, there have been two very small groups that have directly enjoyed the huge success of Israeli SaaS companies: Founders/employees of respective startups that have done well and partners of venture capital firms, either foreign or domestic. That's a very small group of people benefiting from a very large technological and economic trend that Israel is at the forefront of. We believe it’s time for the Israeli public to have the opportunity to become one of these benefactors, through allocations in pension funds or the opportunity to invest directly in companies that are traded on the TASE – it’s time for this option to exist for those who believe it is the right fit for their portfolio. Times change – and we believe this may be one of the critical changes that will help truly transform Israel from the "Start-Up Nation" to the "Scale-Up Nation".Gal Gitter is a Partner and Managing Director at Ibex Investors, a U.S-Based Investment Firm
This article is not a recommendation to buy or sell any security and reliance is not advised. Please review the disclaimer .