(photo credit: Associated Press)
Cellphone developer Modu intends to lay off most of its workers, Dov Moran, the
startup’s founder, said in a conference call with reporters and analysts
“We did not succeed in the process of raising money in
Tel Aviv,” he said. “We are going to inform most of our employees of the
termination of their employment. The process is sad; we still believe the
company has huge potential.”
“This is not the end of Modu,” Moran said.
“We will try to raise money from other sources of capital. The company will
continue to sell its products. I regret that raising money on the stock exchange
is interpreted as an automatic exit. It saddens me that the approach on the
Israeli capital market is that capital raising for hi-tech companies should take
place on other stock exchanges.
“We did not manage to persuade people
that Modu has great potential, and that hurts a lot. It’s my
Modu currently employs about 30 people.
Modu tried to
issue shares on the Tel Aviv Stock Exchange. A document circulated last Thursday
by Clal Finance Underwriting, one of the underwriters of the offering, showed
that it had attempted to raise up to NIS 145 million in capital and debt, at a
valuation of NIS 333m. before money, a much lower valuation than that at which
it held its latest equity rounds.
Modu, which was founded more than three
years ago, develops modular cellular telephones.
It produces two
telephones, the main one being Modu T, and the second a Wi- Fi-based telephone
called Modu W.
Modu strives to differentiate its products with their
light weight, compact size and low price.
The company has raised $124m.
to date – $104m. in equity investment and $20m.
in convertible loans. The
company was about to make an official launch of its Modu T product.
far as its Tel Aviv IPO was concerned, the company intended to raise half the
planned amount in an equity offering and half in debt. It planned to issue up to
13.3 million shares at NIS 5.46 per share, for a total of NIS 73m., and to raise
a similar maximum amount in an issue of convertible bonds.