WalkMe prepares to go public at a $4 billion valuation

Unlike a slew of other Israeli companies who have chosen to merge with a SPAC, WalkMe has chosen to enter Wall Street through the front door

Israeli website navigation company WalkMe Inc. has begun preparing to go public on Nasdaq. According to a person familiar with the move who spoke to Calcalist on condition of anonymity, the company, which developed a digital adoption platform to simplify user experiences on websites, has joined forces with Goldman Sachs and Morgan Stanley, who will be leading its IPO.

 

WalkMe plans to carry out the move in the third quarter of 2021, assuming the U.S. stock market remains as accommodating to tech companies as it is now.

 

WalkMe President and co-founder Rafi Sweary. Photo: PR

WalkMe is aiming to raise $500 million at a valuation of $4 billion. Unlike a slew of other Israeli companies who have chosen to merge with a special purpose acquisition company (SPAC), WalkMe has chosen to enter Wall Street through the front door and prepare a pre-IPO prospectus.

 

In an age in which most communications between a company and its clients is done digitally, companies need large and sophisticated websites that can answer a wide range of needs. WalkMe develops platforms that aid companies in carrying out digital transformations, enabling them to maximize their technological systems both from the user side, with guidelines and training, and on the analytics side, providing management with insights on what works and what doesn’t, to assist in their rapid transitions to digital platforms.

 

The company was founded in 2011 by Rafael Sweary, who serves as its founder and president, Dan Adika, who serves as its CEO, and Eyal Cohen, who has since left the company.

 

What makes its product unique is that it can be integrated into existing websites as an additional layer without requiring the writing of code. The people at the company that operate WalkMe’s system are not programmers, but rather members of the business’ sales and service teams.

 

While the first iteration of WalkMe’s product was a sort of website guide, the current generation possesses artificial intelligence capabilities that can sense when users encounter difficulties and automatically complete their tasks.

 

In 2018, WalkMe raised $40 million at a valuation of $1 billion. Its backers include Mangrove Capital Partners, EDBI, Insight Partners, Greenspring Associates, Scale Venture Partners, Vitruvian Partners, and Giza Venture Capital. The CEO of Mangrove, the company’s first investor, predicted in 2019 that WalkMe would go public in 2020, something that didn’t pan out.

 

WalkMe’s last financing round was in December 2019, when it raised $90 million in a round led by Vitruvian Partners and Insight Partners, which was investing in a series of Israeli tech companies at the time, at a valuation of $1.9 billion.

 

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With that round, WalkMe became one of Israel’s leading private tech companies, alongside Monday, which is also preparing for an IPO at a similar market cap, JFrog which went public last year, and IronSource, which is aiming to conduct the largest IPO ever by an Israeli company at a valuation of $8 billion in May 2021. WalkMe surpassed $100 million a year in annual revenues in 2019 and according to market estimates that grew to $130-140 million last year, leading to its achieving a positive cash flow. Companies with those sort of revenues are considered mature enough to become publicly traded in today’s scorching Wall Street market.

 

WalkMe’s Digital Adoption Platform features two main applications. The first enables non-programmer teams, such as marketing people, add guides and training manuals to their websites. The system is adaptive, meaning it monitors users’ activities, identifies hesitancy on their part, and assists them in real time.

 

The second and more interesting application enables organizations to give their employees access to all of its available programs. Instead of having to learn the programs, the team members communicate with an inter-organizational chat-bot as a mediating layer. The bot receives instructions for things like ordering a conference room, reporting on vacation days, filing expenses, or posting a new job opening and automatically activates the appropriate programs to carry out the employee’s request.

 

WalkMe operates on a dual subscription model. One is priced according to the number of systems linked to its extension and the second according to the number of users in the organization. The company currently reports 2,000 clients, including large multinationals like Amazon, Microsoft, HP, Delta, Expedia, Comcast, Adobe, eBay, Mastercard, American Express, and Visa. Its platform is based on Amazon’s cloud service.

 

The company employs 850 people, half in two sites in Israel and the rest spread out around the world, in the U.S., Japan, Australia, and Europe.