Fiverr Seeks to Raise Up to $104m in U.S. IPO

Israeli gig economy startup selling 17% stake at up to $20 a share

Ruti Levy
Send in e-mailSend in e-mail
Fiverr CEO Micha Kaufman, Tel Aviv, Israel.
מנכ"ל ומייסד פייבר, מיכה קאופמןCredit: Eyal Toueg
Ruti Levy

Fiverr, an Israeli startup that matches businesses and freelancers, said Monday it planned to raise between $94 million and $104 million in an initial public offering on Wall Street that values the company at $560 million-$620 million after the money.

The figures appear in the final prospectus filed with U.S. Securities and Exchange Commission. The company said it would sell 5.3 million shares at a price of $18 to $20 each equal to a 17% stake. It will trade on the New York Stock Exchange under the ticker FVRR.

J.P. Morgan Securities and Citigroup Global Markets Inc. will be the lead joint book runners of the offering.

The offering comes at a challenging time for tech companies, after high-profile IPOs by ride-hailing companies Uber and Lyft. Nevertheless, Fiverr isn’t the only Israeli startup preparing to go the IPO route, after Gett said in May it had raised $120 million ahead of a planned offering.

Two weeks ago, when Fiverr filed a draft prospectus with only partial information, sources said the company might seek an $800 million valuation.

A player in the gig economy, Fiverr serves as a marketplace for freelancers who offer services such as copy editing, logo design, voice-overs, social media management and translations to businesses and individuals.

Founded in 2010 by Israelis CEO Micha Kaufman and Shai Wininger and based in Tel Aviv, Fiverr originally required freelancers to charge a fixed fee of $5 for their work. The company changed the policy four years later to allow freelancers to charge what they want.

Fiverr’s biggest shareholders are a group of venture capital funds led by VCs Bessemer Venture Partners (14.9% now and 12.4% after the IPO), Accel (12.1% and 10%, respectively), Square Peg Capital (11.3% and 9.4%, respectively), all of them based in the Untied States, and Israel’s Qumra Capital (7% and 5.8%, respectively).

Angel investor Jonathan Kolber has a 15.9% stake that will decline to 13.2% after the IPO. Kaufman holds 9.3%, which will go down to 7.7% after the IPO. Winiger, who left Fivberr in 2014 to found the online insurance company Lemonade, retains a 6.8% stake that will drop to 5.77% post-IPO.

The figures released by Fiverr show it has been growing rapidly but losing money. While revenue rose nearly 45% from $52.1 million in 2017 to $75.5 million last year, net losses widened nearly 90% from $19.3 million in 2017 to $36.1 million in 2018.

In the first quarter of 2019, however, Fiverr posted an $8 million loss, half the figure of a year earlier. The company said it expected to continue posting losses for the foreseeable future as it focuses on growing and investing in technology.