The "at least" is notable here as the $16.4M was from a series B and series C funding round. Presumably there were previous rounds of funding as well. So if you consdier this then the investors are getting hosed. If you take it at today's face value.
Looking at this optimistically, however, I believe that Safend sees Wave as an opportunity for genuine business synergies but also as a way to possibly grow much faster than the would have been able to do on their own.
One thing that's been drilled into my head over the years is that VCs aren't stupid. They may not run a particular business that they fund but they darn sure know everything about the business they can before they invest. So to suggest that these particular VCs, some with Safend board representation, would decide to roll over and be compensated for less than they invested doesn't add up to me. I know nothing about Safend but as we all know security is hot now and I have to assume that Safend also had a bright looking future being "in the right place at the right time"
So they're presented with an opportunity: "partner" with Wave (I'm sure that's how they see it) and the sum of the parts will be worth far more than either partner could do individually. As compensation, they're given a cut of the action that represents a loss to their investors today. But I absolutely have to believe that those shares were not looked at in today's dollars but in what they will become in 1, 2 or 3 years. And based on this one can easily see how Safend becomes a $50 to $100M company to its investors with Wave growing to a $1-2B market cap. What technology growth company these days with Wave's potential and market position isn't worth at least this? (okay, Wave, start demonstrating...)
Of course they have yet to prove it, but I would also be willing to bet that Safend had an indepth look at the mythical pipeline and liked what they saw. They probably also added a dose of Israeli high-tech ego and told themselves that they could make this underperforming Wave company a $2B enterprise on their own.
So I look at this as a Safend IPO in which the founders, VCs etc. see easy money to be made that aligns to their core competancies. And as another poster put it, how else are they going to buy 5M shares of Wave for $2/share?
attcav
AI
