Two Israeli Startups Attain Unicorn Status in Combined Fundraisers of $360m

Ad tech firm AppsFlyer valued at $1.4b; cybersecurity maker Snyk at $1b

Snyk founders Danny Grander, Guy Podjarny and Assaf Hefetz.
Moti Milrod

Two Israeli startups announced giant investment rounds on Tuesday, adding two more companies to the list of local unicorns – companies with valuations of more than $1 billion.

AppsFlyer, an Israeli-American startup that develops tools for measuring the effectiveness of mobile ads, said it raised an enormous $210 million in a fundraising round that valued the company at $1.4 billion before the money.

The U.S. venture capital fund General Atlantic led the round, joined by the tech investment arms of Goldman Sachs and Deutsche Telekom as well as the Israeli VC funds Pitango Venture Capital, Magma Venture Partners and Qumra Capital.

Meanwhile, Snyk, an Israeli-British cybersecurity startup, said it had raised $150 million at a valuation it said was more than $1 billion, without providing an exact figure. The round was unusual both because it followed a $70 million fundraiser just four months ago and because 260 of its employees had celebrated the event at a party last Thursday without leaking news of it until the formal announcement Tuesday.

“We asked them nicely not to say anything,” Danny Grander, who founded Snyk with President Guy Podjarny and Chief Technology Officer Assaf Hefetz, told TheMarker in an interview.

AppsFlyer provides its customers with real-time information on their ad campaigns, including clicks, installations, application level usage, purchases and return on investment. As such, it works as a kind of referee to help brands understand the actual performance of their ad campaigns and to help them control their data.

Oren Kaniel, AppsFlyer’s co-founder and CEO, told TheMarker that an important component of its strategy has been to limit its offerings to measurement services. It avoids the media and advertising segments in order not to lose the trust of its customer over potential conflicts of interest, he said.

AppsFlyer says it works with more than 12,000 customers, including eBay, HBO, Tencent, NBC Universal, Minecraft, Macy’s and Nike. It has raised $294 million since its founding by Kaniel and CTO Reshef Mann.

Its business model is based on a monthly subscription, with additional charges depending on usage and the functions the user chooses. Smaller customers pay about $1,000 a year and the biggest ones pay several hundred thousand dollars.

AppsFlyer has been growing rapidly, with the company saying it is running at more than $150 million in annual recurring revenue in 2019, up five times from what it reported when it raised capital in 2017.

As a result, AppsFlyer has been taking on employees at a breakneck pace, hiring 450 people just in the last 12 months to bring its worldwide payroll to 850. That means the startup has spent a lot of time focusing on real estate.

“It took us a year and a half to find a second building for us in Herzilya, and we’re now looking for a building that can house all our staff in the center [of Israel],” said Kaniel. The company has moved its offices in central Israel 12 times since it was founded in 2011 and houses its 520 Israeli employees in facilities in Haifa and Herzliya.

The Snyk fundraiser was led by the New York-based VC fund Stripes, joined by existing investors Salesforce Ventures, Coatue, Tiger Global, BoldStart, Trend Forward and Amity.

Snyk’s products are designed for developers, rather than cybersecurity staff, to help them find and fix flaws in their source code. It scans for vulnerabilities or license violations from widely used libraries of code, providing a description of the problem, issuing a severity rating and even suggesting a fix. It maintains a giant vulnerability database in its offices in London and Tel Aviv.

Snyk’s back-to-back fundraisers came at the behest of Stripes, an investor in growth companies, Hefetz told TheMarker.

“Stripes, which was part of the previous round in September when it gave us a small check, looked at the company’s crazy rate of growth and the market momentum for digital transformation,” he said. “They realized that every company would need to install tools like Snyk’s. They knew that we planned another fundraiser in the second quarter of 2020 and said to us, ‘Forget all that nonsense, let us come in.’”

The latest round brings Snyk’s total fundraising since it was formed in 2015 to $252 million.