Success at the second attempt: Israeli technology company Kaltura has been floated on Nasdaq at a valuation of $1.24 billion. The company raised $150 million, Trend reports with reference to Globes.
The flotation was at $10 per share, in the middle of the price range set by the company. The amount raised will rise by $22.5 million if the underwriters exercise their option to buy more shares at the offering price within the next 30 days. The shares are due to be listed for trading on The Nasdaq Global Select Market today under the symbol KLTR and the offering is expected to close on July 23, subject to customary closing conditions.
This is the eighth flotation of an Israeli company on Wall Street so far this year.
Kaltura provides solutions for managing video to enterprises and media companies. It set out to make an IPO in early April, but had to defer the offering because of low demand.
Kaltura CEO Ron Yekutiel told "Globes" today, "We're happy about the IPO. In the week that we first embarked on the IPO, the global equity offerings market collapsed, unconnected to Kaltura, after 14 months of success on the primary market. It was simply a bad week, and just as when you go to the beach and the waves are very high, you don't go in suicidally, we decided to wait. Since then we have released the second quarter results, we grew by 40%, beat the forecasts and accelerated the rate of growth - and we waited for the right time. The wait was only three months, which shows that the company was ready, and it was only a question of the market, not of the company. We changed the pricing slightly in order to have more margin of error."
Kaltura was founded by Yekutiel, Dr. Michal Tsur, Dr. Shay David, and Eran Eitam, in 2006 ("This is a veteran company, and it's a marathon, not a hundred meter sprint," says Yekutiel of the fact that the company is only now making an IPO). In the initial IPO attempt, a $90 million offer for sale was planned, but this was cancelled for the second attempt. "The shareholders are far from being under pressure to sell," Yekutiel says. "The sale of shares was not a goal but only a request by the bankers to create a greater flow of shares."
Yekutiel says that the company is experiencing growth momentum and will hire more people, after expanding its activity only recently. "The company is growing fast," he says, "Kaltura develops video products for enterprises, a very flexible, modular broad-based platform, like Lego for video: a variety of different products for different video purposes, such as teaching, or sales and marketing. The system uses every kind of video capability, real-time, live broadcast, on demand."
The proceeds of the IPO will be used to accelerate marketing and sales. "Up to now we have invested more in development than in marketing, and despite that we have accelerated our growth. Now, from a position of strength, we will increase investment in marketing," says Yekutiel. The company also intends to expand in AI, to launch new products, and to enter new markets, among them remote medicine.
"The video revolution has just started," says Yekutiel. "In most enterprises they are only scratching the surface of video's capabilities. The coronavirus accelerated the trend, and raised awareness, and budgets."
"An indirect competitor, and there is also coopertaion between us. Zoom or Teams are collaboration tools. We don't try to replace them in enterprises. With us, video is a means of learning, marketing, carrying out customer service - more integrated products with high connectivity in the enterprise. In many cases, content created on Zoom goes onto our platform, which manages all the video in the organization. And so in the coronavirus pandemic, as the use of Zoom increased, the use of Kaltura increased as well."
Prominent shareholders in Kaltura are: Point 406 Ventures ($176 million); Nexus India ($160 million); Goldman Sachs ($144 million); Yekutiel ($77 million); Tsur ($52 million); David ($50 million).