Israeli company Gett has officially announced a merger with Spack worth $ 950 million

A merger with Spack worth more than $ 1 billion is usually good news for the company, but what if the same company has already raised about $ 900 million over the years, reaching a value of close to $ 2 billion? The Israeli company Gett has officially announced a merger with Spock worth $ 950 million. Last night it was reported about the expected merger in the Wall Street Journal.
Gett is set to become a public company through a merger with Spac Rosecliff Acquisition Corp, which is backed by the Rosecliff Venture Management Fund. The merger will be worth $ 1.1 billion, and Gett will receive the Spack money - $ 253 million. The fund also raises $ 30 million from private investors.
Spock is a non-operating company that raises capital on the stock exchange, and then seeks a private company to merge with. The merger is an alternative way to an IPO. In the past year the use of this practice has gained momentum, and hundreds of Spack companies have been issued and raised hundreds of billions of dollars, with the aim of merging with private companies. The big money that flowed to these companies inflated the levels of value that the private companies receive.
Gett also unveiled its financial performance - the company expects to end the year with revenue of $ 160 million - a 17% growth. However, the company publishes ambitious forecasts: 77% and 81% growth in the next two years, respectively, and revenue of $ 613 million in 2023.
However, in recent months the market has cooled, and there is a negative sentiment towards Spock companies. Most of the shares of the Spac companies fell after the merger, and a large proportion of the investors in these companies withdrew their investments.
Gett has developed a travel app, competing with, among others, Uber and Lift, worth $ 88 billion and $ 18 billion, respectively. The fierce competition in the field is reflected in heavy spending on marketing and travel, in every city where the company has started operating. At Gett, they realized that they could not compete with the deep pockets of its competitors, and began to adopt a different financial strategy - focusing on markets where the company's operations are already established and striving for profitability. Among other things, the company decided to sell its operations in New York.
In early 2020, Gett announced that it had moved to operating profitability, but this was a misleading definition - in fact the company created a statistic that examines its profitability, neutralizing research and development expenses. The attempt to strive for profitability was part of the company's IPO attempts, which it has been planning to issue on the stock exchange for a long time. Another step the company took was to focus on business customers in collaboration with third parties, and the Wall Street Journal noted that this activity accounts for about 40% of the company's total revenue. Another activity the company has entered into is in the field of shipments.
The company presented a negative adjusted EBITDA of $ 30 million in 2021, five million dollars more than in 2020. Adjusted EBITDA reflects profit before interest, tax, depreciation and amortization, as well as equity-based compensation. The company expects to move to a positive adjusted EBITDA of $ 3 million in 2023 but even then it neutralizes expenses of being a public company, in the amount of $ 8 million. This means that even in 2023 the adjusted EBITDA will be negative.
Gett was founded in 2010 by Roy Moore and Dave Weisser. Among other things, the company previously raised $ 300 million from Volkswagen - which is still considered a very high amount. Earlier, in November 2015, the company was worth $ 575 million. Another investor in the company is the Swedish fund Vostok New Ventures, and in its financial reports you can see the value of Gett, which according to the latest reports is $ 1.9 billion, updated to July 2021.