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Monday.com celebrates its IPO at the Nasdaq, June 10, 2021.
Source: Nasdaq

In April, Insight Partners’ Jeff Horing hopped on a flight to Israel for a breakfast with tech CEOs. It was also an opportunity to pay a visit to his firm’s first international office, which had opened less than two years before.

Now, CEOs from two of those companies are visiting him in New York. They’re actually coming to ring the bell on the Nasdaq, as Israel’s high-growth companies line up to hit the public markets.

Last week, collaboration software-as-a-service (SaaS) vendor Monday.com held its IPO and closed on Friday with a market cap of $8.2 billion. This week, fellow Israeli software company WalkMe, whose technology is designed to simplify enterprise software and applications, is scheduled to go public with a valuation of up to $2.6 billion

Insight is the biggest investor in both. The firm owns a 43% stake in Monday.com and controls 32% of WalkMe. Its combined ownership in the two companies is currently worth about $3.9 billion.

“For a long time, Israel has been the start-up hub, a hive of activity,” Horing wrote in an email, in response to written questions. “But these start-ups are scaling successfully at a more rapid pace.”

Money is flooding into Israeli tech. The country’s start-ups raised $5.37 billion in the first quarter, more than double the amount a year earlier and 89% above the fourth quarter, which was a record period, according to a report from IVC and law firm Meitar.

Game developer Playtika, based in Herzliya, went public in January and has a market cap of $10.6 billion, making it the fourth most-valuable publicly traded tech company in Israel, according to FactSet. Monday.com ranks fifth and WalkMe is poised to crack the top 10.

For Insight, the launch of an Israeli operation in late 2019 marked the firm’s first office opening outside the U.S. since its founding in 1995. But Insight had been investing in and around Tel Aviv for over two decades.

Horing said the firm did its first deal in Israel in 2000. He highlighted Enigma, a developer of software to manufacturers, and Shunra, a network virtualization company that was acquired by Hewlett-Packard, as two early investments.

“I’ve always loved visiting Israel and have many memories at tiny market restaurants eating incredible food, arguing for hours over different technologies and SaaS strategies,” Horing said. “My team and I spent countless hours flying back and forth to Israel, often spending weeks at a time getting to know entrepreneurs and working alongside our portfolio companies.”

Prior to Monday.com, Insight’s marquee investment had been in website creation software company Wix, which went public in 2013. Insight co-led a $40 million round in 2011 and had a 12% stake at the time of the IPO.

Wix’s stock price has since multiplied 17-fold, giving the company a $15 billion market cap, second only to Check Point Software among Israeli tech companies.

“Wix was a foundational investment for Insight in Israel,” Horing said. Wix co-founder Avishai Abrahami is also on Monday.com’s board. Along with Abrahami and Nir Zohar, Wix’s operating chief, “we’ve co-invested in many Israeli deals over the years,” Horing said.

Acquiring an Israeli firm’s portfolio

The most glaring detail on Monday.com’s cap table is the size of Insight’s stake.

Typically when a venture-backed company goes public with a multibillion-dollar valuation, the top firm would hold no more than 30% of the outstanding shares, often much less.

Insight took a unique approach to get to 43%. In February 2019, seven months before opening its Tel Aviv office, Insight purchased the majority of a fund portfolio held by an Israeli firm called Genesis Partners, whose partners were leaving for other ventures.

Within that fund, which closed in 2009, Genesis had invested in Monday.com’s seed and Series A financing rounds. Insight first came in as part of the $25 million Series B in 2017.

After acquiring the contents of the Genesis fund, Insight was able to merge the two firms’ holdings, building a stake that’s now worth $3.1 billion. Genesis was also an early investor in two other Insight-backed companies: online music learning company JoyTunes and business intelligence company Sisense.

Monday.com co-founder and co-CEO Roy Mann told CNBC that Insight was tapping into a big change happening in Israeli tech.

“They had a very strong conviction in Israel and the Israeli ecosystem,” Mann said in an interview after the IPO. “The whole industry matured to a level where entrepreneurs want to build big companies and want to hold them for a long time. Insight was early on to recognize that and really go and back a lot of amazing Israeli companies.”

Horing joined co-founders Mann and Eran Zinman in ringing the Nasdaq’s opening bell on Thursday. The company also had 250 employees come in from cities across the U.S.

Horing will have the opportunity to do it again this week for the WalkMe IPO. In 2017, Insight led a $75 million investment in WalkMe. By following on over the course of two more financing rounds, Insight built up a 32% stake that’s worth $750 million at the top end of WalkMe’s IPO range.

Horing said Insight now has 80 “operating experts” in Israel working with portfolio companies and has expanded in Tel Aviv to take over the space formerly occupied by JFrog, which went public on the Nasdaq last year.

As for what Horing finds most exciting coming out of Israel these days, he said there’s no shortage of opportunities to put money to work.

“Israel is firing on all cylinders,” he said. “Of course cyber is a strong sector but it is much broader to a wide group of SaaS, infrastructure, fintech, gaming, and ad tech.”

WATCH: JFrog CEO on the company’s public debut and outlook

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Drone startup Zipline hits 1 million deliveries, looks to restaurants as it continues to grow

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Drone startup Zipline hits 1 million deliveries, looks to restaurants as it continues to grow

Autonomous delivery drone startup Zipline said Friday that it hit its 1 millionth delivery to customers and that it’s eyeing restaurant partnerships in its next phase of growth.

The San Francisco-based startup designs, builds and operates autonomous delivery drones, working with clients that range from more than 4,700 hospitals, including the Cleveland Clinic, to major brands such as Walmart and GNC. It’s raised more than $500 million so far from investors including Sequoia Capital, a16z and Google Ventures. Zipline is also a CNBC Disruptor 50 company.

The company said its zero-emission drones have now flown more than 70 million autonomous commercial miles across four continents and delivered more than 10 million products.

The milestone 1 millionth delivery carried two bags of IV fluid from a Zipline distribution center in Ghana to a local health facility.

As the company continues to expand, it will bring on Panera Bread in Seattle, Memorial Hermann Health System in Houston, and Jet’s Pizza in Detroit.

Zipline CEO Keller Rinaudo Cliffton told CNBC that 70% of the company’s deliveries have happened in the past two years and, in the future, the goal is to do 1 million deliveries a day.

“The three areas where the incentive really makes the most sense today are health care, quick commerce and food, and those are the three main markets that we focus on,” Rinaudo Cliffton said. “Our goal is to work with really the best brands or the best institutions in each of those markets.”

The push into restaurant partnerships marks an “obvious transition” he said, due to the continuing growth in interest in instant food delivery. Zipline already delivers food from Walmart to customers.

“We need to start using vehicles that are light, fast, autonomous and zero-emission,” Rinaudo Cliffton said. “Delivering in this way is 10 times as fast, it’s less expensive … and relative to the traditional delivery apps that most restaurants will be working with, we triple the service radius, which means you actually [get] 10 times the number of customers who are reachable via instant delivery.”

Zipline deliveries for some Panera locations in Seattle are expected to begin next year, the Panera franchisee’s Chief Operating Officer Ron Bellamy told CNBC. Delivery continues to grow for its business, even in an inflationary environment, he said. Costs with Zipline are anticipated to be on par with what third-party delivery is now, he added, with the hope of that cost lowering over time. 

“I’m encouraged about it, not just even in terms of what I can do for the business, but as a consumer, I think at the end of the day, if it is economical, and it delivers a better overall experience, then the consumer will speak,” Bellamy said.

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Super Micro plunges as investors rotate out of red-hot AI stock ahead of earnings later this month

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Super Micro plunges as investors rotate out of red-hot AI stock ahead of earnings later this month

David Paul Morris | Bloomberg | Getty Images

Super Micro Computer shares plunged 18% on Friday as investors scaled back their holdings of one of the market’s hottest stocks ahead of earnings later this month.

Shares of Super Micro, which joined the S&P 500 in March, are still up about 168% this year after climbing 246% in 2023. The server and computer infrastructure company is a primary vendor for Nvidia, whose technology is the backbone for most of today’s powerful artificial intelligence models.

Super Micro said in a brief press release on Friday that it will report fiscal third-quarter results on April 30. The company broke from its pattern of providing preliminary results. In January, Super Micro increased its sales and earnings guidance 11 days before announcing second-quarter financials.

The stock is on pace for its steepest drop since Feb. 16, when it fell about 20%.

While Super Micro is getting a big boost from its ties to Nvidia, the market remains highly contested, with competitors including Dell and Hewlett Packard Enterprise planning to build systems using Nvidia’s latest generation of Blackwell graphics processing units.

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Dutch government says it may stop using Facebook over privacy concerns

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Dutch government says it may stop using Facebook over privacy concerns

Morning traffic outside Meta headquarters, in Mountain View, California, U.S. November 9, 2022.

Peter Dasilva | Reuters

The Dutch government said Friday that it may be forced to stop using Facebook after a warning from the Netherlands’ privacy regulator about the Meta-owned social media platform’s privacy risks.

The Dutch Data Protection Authority (DPA) issued a statement advising the Dutch Interior Ministry not to rely on Facebook pages to communicate with citizens if it doesn’t have a clear idea of how Facebook uses the personal data of people who visit government pages.

The Interior Ministry had previously asked the DPA to advise on whether the government could use Facebook pages in a compliant way.

The government wants clarity from Meta “as soon as possible, at the latest before the summer recess, on how they are addressing our concerns,” Alexandra van Huffelen, the Dutch Minister for Digitalization, said in a statement.

“Otherwise, in line with the advice of the DPA, we will be forced to stop our activities on Facebook pages,” she added.

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The Dutch DPA’s chairman, Aleid Wolfsen, said in a statement that “people who visit a government page trust that their personal and sensitive information is in safe hands.”

“The fact that this can also involve information about children and young people makes this even more important. They are vulnerable online and need extra protection,” Wolfsen said in the statement, which was translated to English via Google Translate.

A Meta spokesperson told CNBC: “We fundamentally disagree with the assessment that underpins this advice, which is wrong on the facts and demonstrates a fundamental misunderstanding as to how our products work.”

“We review all Meta products to ensure they comply with laws in the regions in which we offer our services, and will continue to engage with the Government to ensure they can use social media to communicate with people,” the Meta spokesperson added.

The DPA advice serves as further evidence of “growing distrust between European regulators and Meta,” Matthew Holman, a tech, privacy, and AI partner at law firm Cripps, told CNBC via email.

Holman said that the Dutch regulator’s concern is likely to be that user data “is shared with government departments on Meta’s platform and could still be subject to security issues, monitoring or access by US federal agencies.”

– CNBC’s April Roach contributed to this report

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