Cut-price shares for sale in Israeli unicorns

• Published date: 04 August 2022
• Publication title: Globes (Rishon LeZion, Israel)

Tipalti is still a privately-held startup, and its valuation is only set during financing rounds. So until Tipalti sets out to raise more money, its valuation officially remains at $8.3 billion, regardless of what is happening on the stock markets. However, according to information reaching "Globes," at least one Tipalti shareholder has expressed interest in selling its stake as part of a secondary deal, at a much lower valuation of $4.7 billion - 48% less than in the most recent financing round, at a price that reflects the general trend in the market

Prepared to sell shares at half price

This price is part of an offer submitted to organizations in the tech market by an international company that specializes in secondary investments - the direct sell of shares in privately-held companies to other investors. The offer includes options to invest in an entire range of Israeli startups, in most cases at a discount on the valuation in the most recent financing round when the market was peaking in 2021. These offers are based on shareholders who want to realize their holdings in unicorns at the moment, and understand that it would be difficult to do so at 2021 values. In some of the cases, shares worth several millions of dollars are involved and in other cases the shares being offered are worth up to $20 million.

Tipalti said, "This is false. There are no secondary deals at Tipalti. All share deals at Tipalti require approval from the board of directors and the board of directors has categorically not approved any deals at the moment."

Take for example the offer sent to investors including the option to acquire shares in eToro, the online capital market trading platform, at a valuation of $4.5 billion. eToro was supposed to list on Nasdaq through a SPAC merger at a company valuation of $10.4 billion, which was then cut to $8.8 billion. The merger was canceled due to the market conditions and now at least one eToro investor, according to the offer, is ready to sell their holdings, at a little over half the last agreed valuation.

eToro's SPAC merger, like the planned Wall Street IPO of online fraud prevention company Forter and cybersecurity company Cybereason, were meant to provide liquidity to investors and shareholders. According to reports, both Forter and Cybereason planned IPOs this year at valuations of $5 billion, after raising money in their most recent financing rounds at valuations of $3 billion.

In current conditions it's difficult to complete IPOs

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