Gefen International A.I. Limited (ASX:GFN) a platform provider that empowers and transforms agent-based networks, has commenced trading on the Australian Securities Exchange (ASX) following the completion of its successful initial public offering (IPO).
The IPO raised gross proceeds of A$25 million at an issue price of A$1.00 per share. Gefen closed its offer on May21, 2021 after receiving applications from investors well in excess of the maximum IPO raise. The IPO was underpinned by a high-quality shareholder base which included institutional and retail investors, along with the strong support of existing Gefen shareholders including Regal Funds Management, Ellerston Capital and Perennial.
On listing, Gefen will have approximately 127.9 million shares on issue implying a market capitalisation of $127.9 million at the Offer Price. RM Corporate Finance and Morgans Financial acted as Joint Lead Managers to the IPO.
Since 2016, Gefen has raised US$14.5 million in venture capital funding as well as a total of A$6.5 million in two pre-IPO rounds similarly supported by high-quality sophisticated and institutional investors.
The company will use funds raised from the Offer to execute a number of strategic growth initiatives including expanding its sales and marketing teams and funding research and development of its unique platform.
In a quest for organic growth in the years ahead, Gefen will continue to direct a part of its sales and marketing budget towards attracting more carriers to the platform, onboarding their respective agent networks and customers. Gefen also plans to further bolster revenues by entry into adjacent segments like the provision of advertising solutions and processing-related services as well as potential acquisition opportunities.
Driving the digital transformation of agent-based businesses globally Gefen has developed a disruptive platform for regulation-heavy industries in which carriers use agents to sell complex products to customers.
The company currently has two main revenue sources – recurring subscription license fees paid by carriers, and transactional agent solutions fees paid as commissions by carriers from sales generated through the independent agent network.
In addition to these, the company also plans to introduce and activate two new revenue streams this year – advertising solutions and processing fees. Gefen operates in a large and growing global market which was worth an estimated $358 billion in 2020 and is expected to grow to $462 billion by 2023. 1 While Gefen is primarily focused on the finance and insurance sectors, its platform can be used by any agent-based business.
The company enables the digital transformation of agents at a large scale and has already attracted Tier 1 insurance clients including the world’s third-largest insurer Generali (BIT: G), as well as major insurers TAL and Manulife (TSX: MFC, NYSE: MFC, HK: 0945).
The compounding effects of compliance risk and changes in customer expectations, together with the COVID-19 pandemic, has accelerated the adoption by global enterprises digitally transforming and automating their entire agent networks. These tailwinds have translated into strong revenue growth for the Company. In FY20, Gefen achieved revenue of A$16.4 million, up from A$1.7 million in FY18 and A$4.5 million in FY19. The Company’s fiscal year coincides with the calendar year.