Israeli High-tech Company JFrog Soars 55% on Nasdaq IPO

In Nasdaq's first virtual IPO, the Netanya-based software company reaches $4 billion valuation

Genia Wilensky
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Senior JFrog staff at their road show, 8 September, 2020.
Senior JFrog staff at their road show, 8 September, 2020.Credit: Meirav Arielly

Netanya-based software company JFrog opened trade on the Nasdaq stock exchange in New York to mark its IPO on Wednesday, and saw its share price soar by more than 55%.

This is Nasdaq’s first IPO conducted over live broadcast.

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JFrog’s stock launched at $44 per share, and quickly hit a trading price of $74. As of Wednesday evening Israel time, the share was trading at $70.

JFrog conducted an initial share offering of 8 million shares, equal to about 9% of the company’s share capital, and gave underwriters options on another 1.7 million shares, equal to 2% of the company.

The opening price of $44 a share reflected a valuation of $4 billion for the company, before the money. This is 25% more than the company’s initial valuation in its first shelf prospectus. After its road show with institutional investors, it reported that its proposed price range would be $39-$41.

Without taking into account a future option sale to underwriters, the company raised $320 million in the share offering, after taking costs into account. This gives the company a valuation of $4.3 billion after the money.

Jfrog’s products enable companies to unroll frequent software updates without affecting customers’ usage. The company’s main product is called Artifactory, which enables managing open-source software libraries. Open-source software are programs whose source code is accessible to all, and thus can be shared at no cost. However, this often leads to many versions of similar programs. Artifactory enables development teams to trace which version of a program they’re using and functions as an encyclopedia for managing this information. Over the past few years, the company expanded into developing software for managing versions of virtual containers.

According to the company’s August shelf prospectus, its revenues in 2019 were $105 million, a 65% increase over 2018. The company still isn’t profitable, but its losses have shrunk over the years. In 2018 it lost $26 million, and in 2019 it lost $5.4 million.