Vesttoo, the insurance-linked securities (ILS) focused financial technology company, is reportedly seeking to raise a Series D funding round at a valuation of between $1.5 billion and as much as $2 billion.
The report from CTech, the Israeli tech and innovation arm of local publisher Calcalist, states that an internal memo seen by the journalists saw Vesttoo CEO Yaniv Bertele announcing the new fundraising round to employees.
Bertele wrote that, “The company has already started a funding process at a significantly higher value than the previous round, which will be completed in the coming months.”
The company last raised funds at a $1 billion valuation last year, when it closed an $80 million Series C round.
CTech reported that Vesttoo has already signed up two American investment banks to manage its new Series D funding round.
The Israeli tech publisher also said that Vesttoo’s 2022 revenues are around $110 million, up on $30 million for 2021.
In addition, it reported that Vesttoo’s EBITDA for 2022 has been estimated at $60 million, compared to $20 million for 2021.
The article also references the fact one of Vesttoo’s investors, Sure-Tech, had sold its stake in the company at a valuation of $750 million recently.
While this is below the $1 billion valuation, which is typical of secondary sales at this time (more on this below), this investor has still made a significant return on its investment in Vesttoo.
Sure-tech is known as an investor that seeks to return value from its investments to its investors on a regular basis, which could often be much faster than private companies might appreciate.
CTech reported that Vesttoo CEO Bertele wrote in his memo to employees, “Last week, a secondary deal was signed, in which Sure-Tech sold the rest of its holdings in the company for a reported 15 times its original investment.
“Sure-Tech, as a shareholder, sold its holding in the company at a 20% discount on the valuation in the Series C, which was $1 billion. Sure-Tech were very difficult shareholders in their ongoing dealings with us. Dealing with them pointed to motives that are not in line with the typical conduct of a public company in Israel. Following this, I acted personally to make sure that the sale of their shares was completed. The buyer is one of our existing shareholders, which further increases market and shareholder confidence in us,” Bertele explained.
The stake in Vesttoo was sold to Black River Ventures, an existing backer from the ILS tech firm’s Series C round.
Following the sale, CTech reported that Sure-Tech said, “We wish Vesttoo success in its continued business development and are thankful for the opportunity we had to invest in it.”
It’s important to note that a significant number of tech-startups are experiencing secondary sales at below their last funding round valuation globally, with their valuations slashed by multiples, much greater than the discount in Vesttoo’s case.
This has been a situation triggered by the global macro-economic environment and bubble that was seen in some tech stocks in recent years, driving reduced valuations for many. But in Vesttoo’s case, the reported revenue figures and EBITDA estimates, as well as the year-on-year growth, provide support to the last round valuation.
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