Remarkably, there has been increased activity in Israeli IPOs and M&As after COVID 19 (1st round).
This was led by Lemonade, an Online insurance company. Lemonade Inc. has raised $319 million in its initial public offering (IPO) on the New York Stock Exchange on Wednesday. The IPO was made at a price of $29 per stock, representing a $1.6 billion valuation The shares surged on the first day of trading, climbing by more than 100%, and continue to rise and is currently in excess of $4 billion.
What makes the Lemonade Story more compelling is to comparison to the Market Cap of the Israeli Leading Insurance Companies.
Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) (NIS 3.5 billion)
The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) (NIS 3.3 billion).
Cal Insurance (Nis 1.5 Million)
Migdal (NIS 1.8 Million)
So, we have an Insurance startup worth more than the 4 biggest Insurance Companies and Lemonade only focuses on Home Insurance. Although we are not comparing Apples and Oranges, it would be useful to explore the key objectives that have propelled Lemonade. They firstly placed the Customer Experience first and have tried to overcome the inherent conflict of interest in traditional insurance. They then use AI and Machine learning. This is the new frontier.
Over the last few months, Covid19 has brought highlighted how Big Insurers and Banks mistreat their Customers, and how much there is a need for change in customer-first approach and user-friendly digital solutions. I speak for myself how many wasted hours and months trying to get finances rearranged and Banks not being there for their customers. The same goes for Government Institutions, and Municipalities. This can range from waiting on the Phone, no Callback, waiting weeks, months, or not getting issues resolved at all and bureaucracy.
So, it is no wonder that we seeing a big interest in Lemonade. This is only the beginning of a new world where Customers expect more and will change alliances for a better customer experience.
See Video for the inside story,
While the IPO market appeal seemed have to declined over the last few years, it seems to be making a comeback.
Similarly this year, we saw high levels of Investment in Israeli Digital, AI and Security companies which is powering on despite or maybe because of the change required the new post COVID world.
On a quick perusal of Globes.com – a few headlines caught my attention,
BlackRock increases SolarEdge stake
SolarEdge provides power optimizers, solar inverters, and monitoring systems for the fast-growing photovoltaic arrays market. On Friday, the company’s share price rose 1.44% to $159.44, giving a market cap of $7.913 billion. BlackRock’s stake is worth $815 million.
Rowe Price becomes Wix’s largest shareholder
The US investment management firm has built a 10.5% stake worth $1.6 billion
US investment management firm T. Rowe Price (Nasdaq: TROW) is once again a party at interest in Israeli cloud based web development services company Wix.com Ltd. (Nasdaq: WIX), after selling much of its stake in recent years, probably at a major profit.
Wix’s share price rose fell 0.84% on Wall Street on Friday to $294.23, giving a market cap of $15.271 billion. The share price has jumped 140% since the start of 2020.
AudioCodes raises $91m in Nasdaq secondary offering
The share price is currently $32.97, giving a market cap of $1.037 billion. Audio Codes was originally listed in 1999 and has gone through many highs and lows . Patience and Perseverance pays off https://www.macrotrends.net/stocks/charts/AUDC/audiocodes/stock-price-history
Each of these are amazing stories and is even more compelling when comparing to the Israeli Largest listed Companies on the TASE.
So, now we a start-up like Wix in the top 5 of Israeli Companies by Valuation.
However, we still need to ask how does a company that never turned a profit reach a valuation of in excess of $10 billion? This answer is beyond the scope of this blog, but one reason given is the ease of use and user Friendliness.
Whether this is a bubble or trend is not known, one thing for sure is That Good Tech (Ai ) combined with a positive user (customer) is the way forward.