What do Goldman Sachs, Morgan Stanley, ‘Jay Z’, Jeff Bezos, Softbank, Tencent, Axel Springer, and OurCrowd all have in common? They all invested in Uber before it went public today (May 10, 2019).
Where OurCrowd stands out from the pack is the fact that OurCrowd enables smaller investors to participate in the growth of private companies prior to an initial public offering (IPO). Uniquely, OurCrowd provides access to promising young firms via their crowdfunding platform that, otherwise, these retail (accredited) investors would never stand a chance to invest in.
Incredibly, this is not the only high profile IPO that an OurCrowd portfolio company completed in the past week. Beyond Meat (NASDAQ:BYND) went public last Friday at $25 a share. Immediately, the share price popped higher and, as of today, trades at around $64 a share. Beyond Meat’s market cap stands at over $3.7 billion.
Uber (NYSE:UBER), the most anticipated IPO this year and the largest tech offering since Alibaba, went public at $45 a share and a market value of over $80 billion. Uber is one of the ten largest IPOs of all time. If you had been fortunate enough to have invested in UBER’s seed round, a $10,000 check would now be worth tens of millions of dollars.
Granted, market conditions when Uber went public were quite a bit different than the week prior, but regardless as to where the price lands, pre-IPO investors are the ones that scored big in this offer.
OurCrowd was a later stage investor in Beyond Meat participating in a funding round the year prior to the IPO. OurCrowd decided to back the company after founder and CEO Jon Medved did a taste test during a family cook-out that passed with flying colors. At OurCrowd’s Annual Investor Summit in March, Beyond Meat burgers were served to the thousands of attendees.
Shares in Uber came in a roundabout manner. OurCrowd was an early investor in JUMP, during their Series A round, which was acquired by Uber in April 2018.
After their first investment, OurCrowd tripled their position.
JUMP is an electric, dockless bike-sharing service that compliments the Uber service. Rumors have pegged the acquisition price of JUMP at around $200 million.
OurCrowd, launched in 2013, was conceptualized as providing access to smaller investors to VC level investment opportunities at a global level. While based in Israel, a hot startup marketplace and home to many of OurCrowd’s portfolio companies, OurCrowd seeks out promising young companies regardless of geography.
It is typical for OurCrowd investors to be participating alongside famous UHNW individuals or global VCs. The platform itself takes a stake in each offering thus it has skin in the game and interests are aligned.
At OurCrowd’s Annual Investor Summit, Medved announced that over $1 billion has been committed via the platform. More than 30,000 accredited investors have participated in the offerings which typically hold a minimum ticket of just $10,000. OurCrowd offers single company investments as well as a growing number of diversified sector funds.
Earlier this week, Crowdfund Insider had a chance to catch up with Medved in between flights. Medved was ecstatic at the turn of events as two high profile IPOs in a week is not exactly something that you plan.
Early stage investing is a pursuit that takes patience. Investors expect to park their funds for years before an exit opportunity such as an acquisition or public offering. Medved said that today, there are five Unicorns in the OurCrowd portfolio. Besides Uber and Beyond Meat, OurCrowd holds shares in the Insurtech Lemonade, Casper, and Klook.
Rumors indicate that there may be a few more OurCrowd portfolio companies pursuing an IPO in the coming months.
Medved said they are not just smart investors, they are value-added investors.
“We are very active in following on. We are playing with the big boys now. This is not about a trade. This is about building companies,” he said.
Medved said once they invest, they help the company to succeed. Using JUMP as an example, OurCrowd introduced them to a board member who became their CFO – a key member of their team. OurCrowd mobilizes their “crowd” to help companies grow.
Medved said the best deals get to pick who they want to invest in their company.
“The only way you can compete is not by paying more it is how you explain how you add value to the company after the investment.”
Deal flow is off the charts, said Medved. Success begets success.
Regarding Uber and Beyond Meat, Medved could not provide specific returns but he was clearly pleased. He said that between the two companies over one hundred investors participated
“…people are happy. we are working our butts off,” Medved shared.
Medved would like to provide even more access to a wider audience. While recognizing the shortcomings in current rules that limit individual participation in private offerings, Medved notes that currently, they are only tapping a small percentage of the 14 to 15 million accredited investors in the US.
“If we can reach 2% of that [accredited] market, we can grow our customer base by 10x.”
Having two big IPOs under their belt should help OurCrowd hit that target.