The Tel Aviv Stock Exchange (TASE) has launched TASE UP, an electronic platform for private companies to access investments from institutional and accredited investors. Unlike listing on TASE main market, companies that are listed on TASE UP platform remain private and are not subject to any reporting or prospectus publishing requirements under the Israeli Securities Law.
TASE CEO, Ittai Ben-Zeev, says: “TASE is committed to the advancement of the Israeli economy and of the Israeli companies operating in this environment. Today, we are taking this commitment to the next level with TASE UP – a platform that completely transforms capital raising by companies and, for the first time in Israel, harnesses the advantages of the Tel Aviv Stock Exchange, such as access to investors and liquidity, to the benefit of those companies that, at least for the time being, wish to remain private. With the coronavirus looming, as private investors are reluctant to invest in high-tech and technology companies are on the brink of suspension of operations and growth, this solution rises to the challenge. We believe that this solution can bring more and more high-tech companies in this Start-Up Nation to grow and evolve into independent companies with a better connection to the institutional investors and to other investors that are looking to increase their exposure to the technology sector.”
The launch of the new platform and its introduction to investors and to the local technology ecosystem will be accompanied by a digital campaign, fronted by familiar comedian, Adi Ashkenazi, after several successful campaigns with TASE. The introduction and exposure of TASE UP aims to position it as the way forward – your next milestone – for entrepreneurs and company leaders in their journey to the top and offers a designated website for companies and investors.
Entities that are permitted to raise capital on TASE UP enjoy unique access to thousands of accredited investors and institutional investors through TASE’s extensive distribution channels, a variety of capital raising channels that are customised to their needs and liquidity for their shareholders.
This streamlined, agile and innovative process affords exemption from prospectus publishing and regular reporting obligations. Listing on TASE UP is suited to a variety of securities and capital structures: shares, bonds, convertible bonds, warrants, participation units and options. The platform is open to technology and biomed companies, venture capital funds, credit funds and REITs investing overseas. TASE estimates the benefits of the platform can be enjoyed by hundreds of companies.
Investors who are permitted to transact on the TASE UP platform enjoy, for the first time in Israel, direct access to investment in private companies through a platform that was constructed to resemble the infrastructure of TASE’s trading and clearing systems and is therefore readily accessible and familiar to them. The investors will also enjoy liquidity for investment, listing, clearing and operation of the payments as applicable to a listed security, as well as identification (ISIN) and presentation of the investor’s holdings in its bank account. Foreign investors will be granted exemption from withholding of tax at source on interest payments.
The platform is also available to public institutions, corporations with equity in excess of NIS 50 million, investment consultants or investment marketers buying for their own account, venture capital funds and private accredited investors, as defined in the Securities Law. These represent thousands of potential investors.
For many years, Israeli technology companies established and grown in Israel have been raising capital from local venture capital funds and angels as well as from international funds and corporations and foreign technology investors. These sources have become scarce in recent months on the backdrop of the coronavirus outbreak and the global economic crisis. Also, for many years Israeli public institutions have invested sparingly in local growth companies and the Israeli public has therefore had relatively little exposure to this successful sector, despite its notable economic activity and growth potential.
TASE believes that a connection with the local technology ecosystem is a strategic imperative and aims to optimally reflect the Israeli economy and allow the Israeli public to more significantly partake in the success of the local high-tech sector. According to IVC, in the first half of 2020 local start-up companies raised close to USD5.6 billion, of which only USD1.3 billion in Israeli money. And even those investments were mostly made by private funds and entities in which the general public is not invested.
TASE also believes that diversification of financing sources, particularly in these challenging times, alongside increased exposure of Israeli investors to the growth companies, will improve the market and allow more Israeli growth companies to maintain their independence and even grow and develop in Israel, possibly paving the way to their future listing on TASE and subsequently also on leading international exchanges.
TASE UP was established following the Israel Securities Authority (ISA) approval of the TACT-Institutional platform and picks up directly from the Innovation Authority’s plan for the encouragement of institutional investments in high-tech companies and the creation of an investment track that offers public institutions a State guarantee for their portfolio of investment in technology companies with advanced-stage funding. This track was formulated by the Innovation Authority, the Ministry of Finance, the Capital Market Authority and the ISA.
In order to expand the platform’s investor base, TASE has collaborated with several entities to strengthen investors’ connection with high-tech companies and the local ecosystem.
International investment bank, Jefferies – TASE is currently formulating a unique collaboration with Jefferies for the support of Israeli high-tech companies that raise capital on the platform. Jefferies is a leader in capital markets and financial high-tech and biotechnology transactions and also has a strong presence in the Israeli capital market.
Fundit – An investment platform for capital raising by businesses that combines the knowledge and experience of Headstart Group, Israel’s first and largest crowdfunding group, and the expertise of Poalim IBI in capital markets. Fundit is supervised by the Israel Securities Authority and has extensive experience in capital raising for businesses and ventures, including in technology. To date, NIS 315 million has been raised for 140 projects through Fundit.
Novus – A digital issuance platform to manage a complete automated process for the itraded alternative securities among qualified investors. Novus will enable issuers to initiate a deal, reach and communicate with investors globally, market and share data, conduct a bidding process and close a successful IQIO (Initial Qualified Investor Offering).
TASE also works in cooperation with IVC, the leading Israeli high-tech business research and data center, which will supply initial information on the private companies that list on TASE UP, making it accessible to the investors.
In the past few years, TASE has dedicated considerable resources and efforts to the establishment of an advanced technological infrastructure for a more sophisticated market and the better accessibility of TASE and its listed companies to investors worldwide, this as part of the global trend of digital transformation in the financial sector in general and in the capital market in particular.
Within this mindset, TASE announced the launch, on 2 November, 2020, of a Central Blockchain Securities Lending Platform as an optimal response to the needs of investors. This innovative platform is the first of its kind and will enable capital market players direct lending among all the major financial instruments. TASE has also introduced co-location and hosting services for trading servers at its Data Center. The co-location service implements the most advanced infrastructure and international standards and offers equal latency for all co-location customers regardless of their location internally in TASE’s Data Center.