Israeli startup Constru up for sale after claiming judicial overhaul nixed funding
Israeli startup Constru up for sale after claiming judicial overhaul nixed funding
Constru appealed to the Tel Aviv District Court for financial assistance at the end of March, claiming that it ran into a "perfect storm", due to, among other things, "the growing concerns of investors to make investments in Israel in view of the approaching judicial overhaul"
Israeli startup Constru, which claimed that its funding was impacted due to the impending judicial overhaul, is up for sale, according to the first report submitted on Friday by the company's trustee.
The report reveals that trustee Danit Rimon, head of Arnon, Tadmor-Levy law firm’s insolvency and restructuring practice group, has put the company up for sale and requested an extension of the order freezing the proceedings for the company. Rimon also requested Judge Hagai Brenner's approval to lay off any of the company's employees.
The trustee stated in the report that "In light of the company's financial situation, with extremely low amounts in its coffers which do not allow, at this stage, to cover its current expenses, only a quick sale transaction, in which the buyer will purchase the company, as a whole, will maximize the repayment of the debt to creditors and enable the rehabilitation of the company and the continued employment of a significant portion of its employees."
The report also shows that the trustee is conducting negotiations with several parties and has even published an invitation to make proposals. The trustee states that "since some of the company's employees are a significant and critical component of the sale process, and bearing in mind that the company's account does not, as of today, have enough funds to pay the workers' wages - there is a real need to promote a sale transaction in a hurry, especially bearing in mind that a number of workers whose wages have not been paid for over two months are essential workers for the success of the sale process."
Constru appealed to the Tel Aviv District Court for financial assistance at the end of March, claiming that it ran into a "perfect storm", due to, among other things, "the growing concerns of investors to make investments in Israel in view of the approaching judicial overhaul."
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According to the company, "a number of investors, including the leading investor in the current investment round, withdrew from their previous intention to invest in the company,” preventing Constru from completing the round on time.
The company is estimated to currently have a debt of $4.5 million.
Constru develops and commercializes an AI platform for construction processes. It was established in 2017 and is held by a number of different owners, including VC funds that made investments in the company. The company has raised a total of about $19.5 million. The company is led by CEO and CO-Founder Michael Sasson and Co-Founder and Chief Construction Innovation Shalom Bellaish.
