Israeli fintech startup Pagaya seals $8.5 billion SPAC merger
Pagaya Technologies has become the latest Israeli company to
agree to merge with a SPAC (special-purpose acquisition company), reaching a
deal on Tuesday night with EJF Acquisition Corp to go public at an $8.5 billion
valuation.
Pagaya is set to receive $488 million in the merger, $288
million raised previously by the SPAC, and $200 million in PIPE investments.
Pagaya uses machine learning and big data analytics to
manage institutional money, with a focus on fixed income and alternative
credit. The company's technology platform, Pagaya Pulse, runs on a suite of
artificial intelligence technologies and state-of-the-art algorithms. The
firm’s total consumer credit ABS issuance is over $1 billion. The company was
founded in 2016 by CEO Gal Krubiner, CTO Avital Pardo and CRO Yahav Yulzari.
Through the first three months of the year, Pagaya
registered revenue reflecting $300 million annually, and a profit of $100
million for the year.
Pagaya's valuation in the deal will place it among the
world's largest fintech companies a mere five years after it was founded.
The high valuation is the result of the significant growth
experienced by the company over recent months. Calcalist has learned that
during the first three months of the year, Pagaya registered revenue reflecting
$300 million annually, and a profit of $100 million for the year. The company's
revenue in 2019 stood at $100 million. These numbers are especially impressive
when considering Pagaya was only founded in 2016. Pagaya has tripled its
workforce over the past year and currently employs 350 people in total, 250 of
them in Israel and the rest in the U.S.
Pagaya raised $102 million in a Series D funding round last
year, taking its total funding to $215 million. The round included
participation by Aflac Global Ventures, Poalim Capital Markets, Viola, Oak
HC/FT, former Chairman and CEO of American Express Harvey Golub, Clal Insurance
Ltd., GF Investments, and Siam Commercial Bank.
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