Pagaya Technologies has become the latest Israeli company to agree to merge with a SPAC (special-purpose acquisition company), reaching a deal on Tuesday night with EJF Acquisition Corp to go public at an $8.5 billion valuation.
Pagaya is set to receive $488 million in the merger, $288 million raised previously by the SPAC, and $200 million in PIPE investments.
Pagaya uses machine learning and big data analytics to manage institutional money, with a focus on fixed income and alternative credit. The company's technology platform, Pagaya Pulse, runs on a suite of artificial intelligence technologies and state-of-the-art algorithms. The firm’s total consumer credit ABS issuance is over $1 billion. The company was founded in 2016 by CEO Gal Krubiner, CTO Avital Pardo and CRO Yahav Yulzari.
Through the first three months of the year, Pagaya registered revenue reflecting $300 million annually, and a profit of $100 million for the year.
Pagaya's valuation in the deal will place it among the world's largest fintech companies a mere five years after it was founded.
The high valuation is the result of the significant growth experienced by the company over recent months. Calcalist has learned that during the first three months of the year, Pagaya registered revenue reflecting $300 million annually, and a profit of $100 million for the year. The company's revenue in 2019 stood at $100 million. These numbers are especially impressive when considering Pagaya was only founded in 2016. Pagaya has tripled its workforce over the past year and currently employs 350 people in total, 250 of them in Israel and the rest in the U.S.
Pagaya raised $102 million in a Series D funding round last year, taking its total funding to $215 million. The round included participation by Aflac Global Ventures, Poalim Capital Markets, Viola, Oak HC/FT, former Chairman and CEO of American Express Harvey Golub, Clal Insurance Ltd., GF Investments, and Siam Commercial Bank.
UBS Investment Bank and Barclays served as financial and capital markets advisor to EJF Acquisition, while J.P. Morgan Securities exclusively advised Pagaya on the deal.