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Screenshot of a breaking news alert e-mail from Q2 2017
Setting its sights very high in the summer this year, digital marketing company Matomy (MTMY:LN) realized the value of its commercial enterprise with its preperation for initial public offering (IPO) in June this year which the company projected would raise $75 million and value the company at $350 million.
Just a few months on, the company, which specializes in providing corporate clients with a single gateway for perfomance based marketing solutions on web, mobile, and social platforms with a significant stream of revenue being generated by firms in the online brokerage sector has gone one step further than its original plans by selling a 20% share of the company to one of the investors that was initially presented with the firm’s intention to become a publicly listed entity.
Reinforcing the high value of Israel’s highly innovative and industry-leading specialist digital marketing, payment processing and financial technology companies, Matomy recently floated on the London stock market, with the sale of 20% of its stock to media conglomerate Publicis having followed suit.
In exchange for the stake in Matomy, Publicis will pay $66 million, a substantial sum indeed, elevating Matomy to the ranks of Israeli retail FX firm Plus500 which listed on the London Stock Exchange and is going from strength to strength, and compatriot SafeCharge, which raised $125 million when its stock became publicly available on London’s Alternative Investment Market.
According to Israel’s financial news source Globes, Tel Aviv-based Matomy, which was founded in 2006 by advertising executive and Chairman Ilan Shiloah, completed its IPO on the London Stock Exchange in July when it raised $70.1 million at a share price of £2.27, the same amount that Publicis paid in yesterday’s deal.
Speaking to Globes on the rationale behind the transaction, Mr. Shiloah said yesterday “Our vision is to build the best performance-based media company in the world, and with Publicis Groupe becoming our largest shareholder, we will be able to create a more mature and sustainable ecosystem, providing marketers with an unprecedented ability to accurately engage, acquire and retain customers.”
As part of the sale, Mr. Shiloah will reduce his stake in the company from 24.38% to 15.44%. He did add, however, that Matomy is in no need of cash and that only existing shares have been sold with no new shares being issued.
One of the most common aspect among Israel’s vast array of technological, financial, medical and engineering startups which rise very quickly to become multinational firms is the method by which many are conceived. Unlike other parts of the world, Israeli companies favor venture capital investment by specialists with the relevent accumen to assist them on the path to success. This not only means that the right talent is steering the company, but it also means zero debt, a totally solvent entity from beginning to IPO, and an interest from investors to ensure success. A quite poignant matter is that Israel has more NASDAQ-listed companies than all of Europe put together, despite the nation’s mere 8 million population, and is the second source of venture capital investment globally outside Silicon Valley in California.
Maurice Levy, CEO of Publicis holds a view which echoes this line of thinking, stating that “Tel Aviv is second only to the Silicon Valley in technological innovation and patents. Matomy is fueled by the innovators and technology experts of Israel and has quickly risen to the top of this important market by creating a world-leading, state-of-the-art platform.”
Ofer Druker, CEO of Matomy has a positive view of the future in the digital advertising industry, stating that “I think there’s a trend in the industry right now that will get bigger and bigger, and that’s the ad agencies, we’ll call them the traditional ones, they will put more and more investment into the digital world. This is something we spoke about at the time of the [IPO] roadshow, but I didn’t think it would happen so soon.”
Canaccord Genuity, which acted as bookrunner on Matomy’s IPO, has agreed to waive the lock-up restrictions to enable the shares to be sold.
“If it was just a financial investment, I don’t think they would have given us a waiver. I think all of us understand that this opportunity is very big. I think in a sense it’s an opportunity of a lifetime,” said Mr Druker.
Photograph: Publicis CEO Maurice Levy