Just when we think we’ve seen it all, a new investment comes along smashing previous highs. This time it’s Trax, an Israeli-Singapore founded company, announcing a massive Series E, totaling $640 million.
The investment was led by SoftBank’s Vision 2 and technology-focused funds managed by existing investor BlackRock, Inc. This round of primary and secondary capital also saw participation from new investors including OMERS, one of Canada’s largest defined benefit pension plans, and Sony Innovation Fund by IGV. Estimations put Trax’s value north of $2 billion.
50% to help employees and existing investors
The pandemic year of 2020 caught Trax in a weird spot. The company closed out 2019 with a $100 million funding round, leading to an early 2020 shopping spree, during which it acquired 2 companies. The acquisitions were officially announced at the beginning of March, just a short time before the world went into quarantine. However, the company’s last quarterly numbers shattered previous records.
Trax reported that the current capital is made up of a direct investment in the company, as well as, a secondary component where options were purchased from stakeholders. In a call with Geektime, Trax co-founder and Chairman, Joel Bar-El, declined to comment on the composition of the investment. But Geektime found out that the split is pretty much 50-50. “Existing investors took advantage and sold a small portion of their stake, and company veterans had a chance to sell some of their options,” explained Bar-El.
Raising for a rainy day
Other than pleasing employees and investors, the question needs to be asked - why raise so much money less than 2 years removed from a $100 million round. Bar-El claims a few reasons for this. First, investors wanted a bigger piece of the company; second, we want to continue acquiring new companies; and third, and maybe the most surprising reason - caution: “In light of the general uncertainty looming over the market, and maybe trends will turn. So, we thought it would be better to secure a bit more capital now that might not be there later.” That “bit” that Bar-El refers to might possibly be the biggest funding round in Israeli high-tech history. So, yeah, just some pocket change.
Kicking off the crisis with layoffs
The timing of the Series E round is a bit weird. Trax claimed in 2020 that the company is headed for an IPO. Bar-El refused to comment on the IPO topic but “the massive round gives Trax breathing room to continue to accelerate growth and focus on increasing operations.” Though, according to info we have, the preparations to go public have continued as planned. Despite the celebration surrounding the funding round and potential IPO, the company had made a few dubious moves recently, where in 2020 and 2021 decided to let go dozens of employees in Israel. An odd move considering the fact that now the company is loaded with cash.
Bar-El averts the slander thrown at the company for the firings, and notes that Trax makes human resource decisions “according to the markets, efficiency, and new product lines.” He added that the company recruits “when there’s a need. And other than the layoff wave at outbreak of the pandemic, the company manages its headcount with long-term vision and according to a multi-year plan.” According to Bar-El, there is absolutely no connection between the potential IPO and funding round to HR decisions.
Trax develops computer vision technology that empowers retailers with a suite of autonomous shelf monitoring solutions and an AI-driven, enterprise-level dynamic merchandising service to help brands and retailers optimize product arrangement in real time. The company was founded in 2010 by Joel Bar-El and Dror Feldheim. The company's headquarters are based in Singapore, while Tel Aviv houses Trax’s R&D center and its 300 employees. The company’s headcount grows once leaving Israel, with 700 employees split between Singapore and LA offices.