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JFrog exceeds expected range with $3.9b IPO valuation

  • September 16, 2020

The pricing of the IPO by Israeli automated software updating company JFrog Ltd. (Nasdaq: FROG) was set even higher than the raised level announced earlier this week. The company is issuing 11,568,218 ordinary shares at a price to the public of $44.00 per share. JFrog originally planned a price in the range of $33-37 for the offering, and raised that to $39-41 on Monday. This means that JFrog is raising $352 million, and the amount could grow by $72 million if the underwriters exercise their option to buy additional shares. At the same time, existing shareholders in the company are selling shares to the tune of $157 million.

JFrog thus comes to its first session of being traded on Wall Street valued at $3.9 billion (and the valuation will rise to $4 billion if the underwriters’ option is exercised). The stock starts to be traded today under the ticker symbol “FROG”.

Morgan Stanley, J.P. Morgan and BofA Securities are acting as the lead book-running managers for the offering. KeyBanc Capital Markets, Piper Sandler, Stifel, William Blair, Oppenheimer Co. and Needham Company are acting as co-managers.

JFrog was founded in 2008 by CEO Shlomi Ben Haim, CTO Yoav Landman and chief data scientist Fred Simon. The company has developed ‘liquid software’ that allows users to implement routine updating of their software. In the IPO, Ben Haim is selling shares worth $28 million and will be left with a holding worth $228 million at the offering price; Landman is selling shares for $22 million and will be left with a holding worth $324 million; and Simon is selling shares for $13.2 million and will be left with a holding worth $249 million.

Two venture capital firms are also realizing part of their holdings: Scale Ventures is selling shares worth $47.7 million and Qumra is selling shares worth $46 million. Other investors have decided not to sell shares: Gemini (14.3%), Sapphire Fund (9.9%), Insight Partners (9.8%), and Dell Investment Fund (8.5%).

According to JFrog’s prospectus, revenue grew 65% to $105 million in 2019, and revenue in the first half of 2020 was $69 million, up 50% from the corresponding period of 2019. JFrog is still not profitable but its losses have been narrowing – from $26 million in 2018 to $5.4 million in 2019 and just $426,000 in the first half of 2020 compared with $2.1 million in the first half of 2019.

The offering is expected to close on September 18, 2020, subject to customary closing conditions.

Published by Globes, Israel business news – – on September 16, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

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