Digital distribution platform provider Gefen Technologies today announced that it has closed a pre-Initial Public Offering (IPO) convertible note offer, successfully raising approximately $4m ahead of its anticipated listing on the Australian Securities Exchange (ASX). The round was heavily oversubscribed, raising double the planned A$2m after significant scalebacks.
Sophisticated and institutional investors supported the pre-IPO raise, with cornerstone investors Regal Funds Management and Ellerston Capital taking almost the entire raise. Gefen will use the funds to cover its IPO costs and continue executing its strategic expansion plans, with a particular focus on growing revenues.
Israel-headquartered Gefen was founded in 2014 and comprises a highly experienced team of Israeli digital experts. To date, over US$15m has been invested in building the Company’s proprietary technology, a solution which enables companies to digitally distribute marketing and communication content through agents to end customers.
Gefen is fundamentally a software-as-a-service (SaaS) business that generates revenues via either subscription fees or merchant shared fees. While the Company is primarily focused on the finance and insurance sectors, its solution can be used by any agent-based business. The Company delivers these tools to networks of agents at a large scale and already has attracted Tier 1 insurance clients including Generali, TAL and Manulife.
Gefen’s strong product fit is exemplified by its rapid growth in customer adoption. In the 2019 calendar year, Gefen achieved revenue of $4.5m and a recurring revenue base of $6.5m. The Company is on track to achieve revenue of over $20m in 2020 and exit the year with a recurring revenue base in excess of $30m. In addition, the Company has historically experienced a zero churn rate and has a Net Promoter Score (NPS) of 8.54 which is unrivalled in the industry.
Gefen has seen a significant spike in business since the onset of the COVID-19 pandemic as global companies are seeking to accelerate the digital transformations of their entire agent networks. Based on this recent surge in business and strong growth in recent years, the Company plans to lodge a prospectus with the Australian Securities and Investment Commission in the 3rd quarter of calendar 2020 and is seeking to raise approximately A$15 million.
Gefen is led by Co-Founders and Co-CEOs Orni Daniel and David Nash. Mr Daniel has over 15 years of experience in managing global online operations across various sectors and Mr Nash is a corporate lawyer with international experience in online payments, e-commerce and banking.
“The strong response we have received from pre-IPO investors has provided us with further confidence to IPO later this year,” said Mr Daniel. “Gefen is one of the few businesses that has been able to thrive during the pandemic as the world becomes increasingly digital. We are in an exciting phase of growth and I’m sure our expansion plans will deliver great value to our shareholders,” he said.
Regal was founded in 2004 and since then has become one of Australia’s leading investment managers, winning numerous awards including Australian Hedge Fund of the Year. Regal is also a substantial backer of another ASX-listed digital marketing platform provider, Bigtincan (ASX:BTH) after making their first investment in the business when it was also unlisted in a pre-IPO capital raising.
Veteran Investment Banker, Nathan Barbarich who’s enjoyed considerable success bringing Israeli technology stocks to market, is assisting in preparing Gefen for its IPO. His firm, RM Corporate Finance, is acting as Corporate Advisor and Lead Manager to Gefen.
“We are very pleased with the result of the pre-IPO raising, which was heavily oversubscribed,” said Mr Barbarich. “The round attracted significant interest from institutional investors including Regal, which came on board as a cornerstone investor. Regal has a history of backing winners and they have clearly seen great potential in Gefen’s business model. RM Corporate Finance and Gefen will continue to work towards an ASX listing, which we are aiming to achieve by year-end.”
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