Tel Aviv-based website builder Wix successfully debuted on the Nasdaq today, raising $127 million by selling 7.7 million shares at $16.50 each, the top end of its intended pricing range. The stock popped briefly above $17.50 before settling back down $16.46.
That price values the company at about $750 million.
“It feels amazing,” CEO and cofounder Avishai Abraham emailed me from the floor of the exchange. “It’s a great day for Wix and I’m so grateful for our amazing team and the hard work that’s led to this day.”
Wix, which has 346 employees in Israel and 59 in the U.S., makes site templates and small, modular web apps that individuals and small businesses use to build inexpensive websites without coding. It has a freemium go-to-market strategy, and currently has over 40 million users in 190 countries, 680,000 of which are paying customers.
The company has had 14 consecutive quarters of growth, but has yet to turn a profit, with a loss of $17.8 million in the first nine months of 2013 on revenue of $55.5 million.
“It’s important to think long term,” Abraham said. “Wix is a market leader with a great team, and amazing products. We’ve had tremendous growth over the last year, and considering that our 40 million users amount to less than one percent of the potential market, we have incredible growth potential.”
In spite of the fact that the sites are built with pre-made components, this is no Geocities — Wix sites can be elegant and usable, if somewhat formulaic. The company publishes with the latest HTML5 technology, and offers free hosting, which users can upgrade to their own custom domain.
Most of the company was primarily owned by its investors, with Bessemer Venture Partners, Mangrove Venture Partners, Benchmark Capital, and Insight Venture Partners owning more than 75 percent of Wix.
“Wix is hugely significant. It demonstrates that you don’t need to be in Silicon Valley to build a great company and validates once again the ‘high risk/high return’ nature of European Venture Capital,” Mark Tluszcz, CEO at Mangrove Capital Partners, said in a statement.
Wix is significant, in part because Israeli companies often get acquired rather than IPO’ing, as founders de-risk and take the cash offered by large American corporations such as Google, Apple, Intel, and others. Abraham didn’t know if Wix was going to start a new trend, however:
“We’re proud to be part of the Israeli start-up community and of the tech creativity and innovation it’s known for. There are many amazing Israeli companies, and if we can help provide a model for how to scale and go public, than we’d be thrilled. But what’s more important is that each company choose the path that best suits its own particular needs.”