Israeli startups join craze as SPACs pack stock market with quickie IPOs
Summary
Get The Start-Up Israels Daily Start-Up by email and never miss our top stories Free Sign Up Israeli smart-car firm Innoviz Technology, a maker of sensors for self-driving cars, announced in December that it will become publicly listed on Nasdaq through a merger with a SPAC. But if we do it here, then we have to do it carefully, looking at the regulations abroad, and determine which balances are needed — terms which will enhance the correlation between the entrepreneur’s interest and that of the investor.” Israel’s business environment, jam-packed with startups looking for cash infusions, seems especially ripe for SPACs, which are attractive to smaller firms that do not have the time or desire to go through the more arduous process of a straight IPO. “An IPO is an arduous and difficult process for even the most hardy of entrepreneurs.” Ben Volkow, CEO and founder of Otonomo, said merging with a SPAC has allowed the firm to “move faster,” both in raising funds and in gaining the “advantages” of being a public company. Questions are asked and answers are required, and this process brings to light any issues within the company that could become a problem in the future, with the aim of protecting the money of small investors who may invest in the firm after the IPO is held. “In the medium or long run, the fact that they came to the market in two different ways doesn’t affect the performance of the shares.” For companies that can have one, a traditional IPO is still the gold standard, proof that they are a real player and not just an upstart.
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