“I remember. I was in Tel Aviv with my Israeli partner. He tells me he thinks he has found a great company and asks me if I want to see them.” The appointment is made. CEO of Mangrove Partners Mark Tluszcz comes out ruffled. “The energy and vision of the founders was such that it was easy to be investors and shareholders of the company. Ten years later, that shows the time needed to build these [outfits]! Skype, it was fast, in three years, but in general, it is more around eight to ten years,” he said via videoconference.
This Wednesday, “his” find enters the Nasdaq. “A listing is a stage in the life of a company. In the world of startups, it’s even the Holy Grail! You enter the big leagues through the front door. It’s fantastic!” he says happily. “When you invest, you remain a minority shareholder, but you have to be part of the board of directors to share your experiences, what you know. We were very involved in setting up the listing. It’s still the unknown, you go into a market, we’ll see the market’s appetite.”
WalkMe publishes software that facilitates support for digitisation, whether for customers or employees, in particular via an interactive approach to guide the use of a website. It will sell up to 10.5m shares with a value of $268m to $340m, which will market the Israeli company at a range of $2.4bn to $2.7bn.
Founded in 2011 by CEO Dan Adika, chairman Rephael Sweary and Eyal Cohen, who has since left, the company has raised $308m from investors such as Insight Partners, Greenspring Associates, Vitruvian Partners, Scale Ventures, Mangrove and Gemini.
In the first quarter, revenues of this company–which has as customers such players as Linkedin, Citigroup, Chevron and AstraZeneca–increased to $42.7m, up 25%. In 2020, the company closed with revenue of $148.3m, up 41% from 2019.
And now? “Defining act two is never easy. Obviously, when you list your company on the stock exchange, this is one of the questions shareholders ask themselves. As in many companies, there is at WalkMe a large laboratory of the future, which is looking for avenues of diversification, new products. It is still early days to talk about it,” the CEO of Mangrove says. “The sine qua non of going public is to be able to answer this question. The nature of the stock market is draconian: every three months, you have to open your kimono and show who you are, with analysts who know the company almost better than you. We’ve seen what’s under the hood, we know what’s coming! We’re pretty confident.”
Since Dan Adika announced the IPO, through the front door and not through a special purpose acquisition company, acquisition attempts have multiplied. “There are entrepreneurs who rightly say they are unsure of the future and sell. And others who are very confident, such as the founder of WalkMe. There is also a certain glory in being listed on the stock exchange. Wix, we listed it for less than $700m, it’s worth $20bn today. We had been tempted, several times, to sell the business. But we have to hold on. These magic moves, for managers like us, rarely happen. Every five to ten years you have one or two projects like this. It is important not to let it go cheap. Six months ago, in the midst of covid, it was horrible, we didn’t know when we were going to be okay. You need solid backing, founders who believe in it, shareholders who have confidence in the team and in the future,” says Tluszcz.