FedEx-Backed Freightos to Go Public
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Freightos Ltd., a digital platform for global freight-booking services, is set to go public through its tie-up with blank-check company Gesher I Acquisition Corp.
As part of the transaction, Freightos has secured $80 million in capital commitments to further scale the business and improve margins, according to a statement reviewed by Bloomberg News. The newly combined entity will have an implied pro forma enterprise value of about $435 million, the companies said.
With headquarters in Jerusalem and Barcelona, Freightos operates as a digital marketplace for the international freight industry. The platform allows for real-time global rate comparisons and booking and shipping management services.
Freightos is going public! @zschreiber says this will allow Freightos to aggressively scale the platform and lead as an international freight booking and payment tool of choice.https://t.co/7GdxGM1CYV
Disclaimer: https://t.co/vlqNri3EeL pic.twitter.com/eduGJoCJVc — Freightos (@freightos) May 31, 2022
The company is expected to have $21 million in revenue this year, said Freightos CEO Zvi Schreiber, adding that the business has just began monetizing bookings. He projects Freightos will see $1.65 billion in gross booking value in 2023.
While public markets have retreated from their pandemic highs, Gesher CEO Ezra Gardner sees an “enormous market opportunity” in Freightos. “When we make an investment, we never try to figure out which way the market is going or which way the stock will go in the day or the week afterwards,” he said.
Existing shareholders in Freightos include FedEx Corp., SGX Group, Aleph, MoreVC, airlines including Qatar Airways and Booking Holdings Chairman Bob Mylod. Qatar Airways, M&G Investments and Composite Analysis Group Inc. are among the firms that made capital pledges to the new business. Indicating their confidence in the venture, existing and new large shareholders have signed lockup agreements spanning two years.
“This was one of the last investor opportunities to take a vast industry, which is still very old fashioned, and bring it online to digitize it,” Schreiber said. Part of current supply chain woes are due to international shipping not being digital, he said.
“So I think this is one of the reasons that Ezra and I felt that it’s time to take Freightos public because suddenly the public understands that supply chains are broken, they not agile enough, and that a digital platform can be a significant part of the solution to them,” Schreiber said.
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The deal is slated to close in the second half of the year pending customary closing conditions. Oppenheimer & Co. served as financial adviser to Freightos, while DLA Piper acted as legal counsel. Gesher was advised by Bryan Cave Leighton Paisner.
Gesher 1, a special purpose acquisition company, raised $115 million including so-called greenshoe shares in an initial public offering in October. Shares of the combined company are expected to trade on the Nasdaq under the symbol FROS.
FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.