Slide 1: Elron - Investor Presentation
ELRON - INVESTOR PRESENTATION August 2020
Slide 2: Comments
This presentation is for information purposes only. By this presentation, Elron does not intend to solicit offers to purchase its securities and the presentation does not constitute an invitation to receive such offers, and nothing said therein constitutes a “public offering”, as defined in the Isra
Slide 3: Elron: We Specialize in Early-Stage Investments with Significant Exit Potential
ELRON: WE SPECIALIZE IN Elron was established in 1962 by Uzia Galil EARLY-STAGE INVESTMENTS WITH to bridge the gap between Israeli R&D SIGNIFICANT EXIT POTENTIAL and industry, and create “a knowledge- based industry” (later named hi-tech…) THE IDEA We have close to 60 We rely on a We focus our years
Slide 4: Elron: Building Value in Venture Capital Investments
ELRON: BUILDING VALUE IN VENTURE CAPITAL INVESTMENTS FINANCIAL INFO: 10 exits totaling $1.5b since Long-standing strategic 2010, including proceeds of partnership with Rafael, $580m for Elron and RDC providing our startups with tech assets & knowhow $202m Team of experienced VC Robust cyber / profes
Slide 5: Teamwork
TEAMWORK An experienced team which led 10 exits, dozens of investments, and follow-on financings totaling hundreds of millions of $s over the last decade YARON ELAD NIV LEVY ZOHAR ROZENBERG ZVIKA SLOVIN CEO CFO Head of Cyber Head of Medtech Vast experience in tech Broad experience in Col. Ret. Heade
Slide 6: Cybersecurity Facts & Figures
CYBERSECURITY FACTS & FIGURES Cybersecurity capital Cyber security budget for raisings, 2018-2019 2019 vs. 2018 $1.2b (76 deals) Nearly 9 of 10 IT buyers and users reported an increase 2018 in their infosec budget for $6.4b All 2019 compared to 2018 (402 deals) Israel On average, they indicated 22%
Slide 7: Cybersecurity Facts & Figures
CYBERSECURITY FACTS & FIGURES Cybersecurity exits of Israeli Prevailing price of Infosec acquisitions, companies, 2015-2019 by age of target company Avg. price/sales valuation for target company per founding decade $1.06b $3.45b (18 deals) (23 deals) 2010s 23 9.17 2015 2019 6.74 Avg. time Avg. time
Slide 8: Cybersecurity: Major Israeli Exits 2015-2020
$1.1B $2.1B $1.9B CYBERSECURITY: MA JOR ISRAELI EXITS 2015-2020 $1.2B $560M $430M $410M $380M $225M $40M $120M $100M $60M 8
Slide 9: Market Trends
MARKET TRENDS Consolidation Change of generations PE buyouts 9
Slide 10: Building Value in Venture Capital Investments: Cyber & Enterprise Software
BUILDING CYBER & ENTERPRISE SOFTWARE VALUE IN Value Creation VENTURE CAPITAL INVESTMENTS 6 years Building a seed portfolio 15 companies 2 exits (3.25x multiple) $129m value created >16 external follow-on $56m invested in $89m: our rounds cyber & holdings enterprise based on last RDC (a joint venture
Slide 11: Cyber/Enterprise Software Value Creation: 2015-2020
CYBER/ENTERPRISE SOFTWARE VALUE CREATION: 2015-2020 in $M EXIT PROVEN CAPABILITIES IN BUILDING VALUE FROM SEED STAGE PARTIAL EXIT EXIT 2012 2013 2014 2015 2016 2017 2018 2019 2020 11
Slide 12: Cyber & Enterprise Software – Growth Catalyst in the Next Decade
Exit Exit CYBER & ENTERPRISE SOFTWARE – GROWTH CATALYST IN THE NEXT DECADE New Round Seed Round A Round B Round C (last yr) 12
Slide 13: Top Headlines on Our Cyber/Enterprise Software Companies
TOP HEADLINES ON OUR CYBER/ ENTERPRISE SOFTWARE COMPANIES 13
Slide 14: Investment & Strategic Partners
Europe Israel North America East Asia INVESTMENT & STRATEGIC PARTNERS 14
Slide 15: Our Mature Cyber/Enterprise Software Companies
OUR MATURE CYBER/ ENTERPRISE SOFTWARE COMPANIES
Slide 16: OpenLegacy: From Legacy System to Application in Record Speed
PARTNERS: FROM LEGACY SYSTEM TO APPLICATION IN RECORD SPEED Raised $10m internal round, Team of 100 employees, in 8 followed by $20m strategic round locations worldwide (US, Latin led by SBI Holdings America, Hong Kong, Japan, $8.2M Europe, Israel) OUR Total investment of $68m ($8m by INVESTMENT us)
Slide 17: IRONSCALES
IRONSCALES ESTABLISHED: 2014 FIRST INVESTMENT: 2015 TOTAL INVESTMENT: $22.3M IRONSCALES recent milestones MAIN PARTNERS: $1.4M K1 Investment Management, Garnered a Raised a $13m Surpassed THE BALANCE OF total of 9 Series B led by 1,000 Jump Capital OUR INVESTMENT awards since returning customers 201
Slide 18: Sixgill
SIXGILL ESTABLISHED: 2014 FIRST INVESTMENT: 2016 TOTAL INVESTMENT: $20.1M MAIN PARTNERS: AUTOMATING ALL PHASES OF THE $6M Sonae IM, REV Venture INTELLIGENCE CYCLE: COLLECTION, ANALYSIS OUR INVESTMENT Partners, OurCrowd, Terra & DISSEMINATION OF DATA Venture Partners VISION: To monitor & analyze Dark
Slide 19: Value-Building Events in Pivotal Companies
VALUE-BUILDING EVENTS IN PIVOTAL COMPANIES
Slide 20: CartiHeal
CARTIHEAL CARTILAGE & BONE REGENERATION IN JOINTS SUCH AS THE KNEE Cartilage injuries affect millions of patients worldwide. The need for a simple, fast, and off-the shelf solution to restore cartilage is an unmet challenge facing medicine today. ESTABLISHED: 2009 $18.4M >500 patients were Stopped p
Slide 21: CartiHeal-Bioventus Transaction: Highlights
CARTIHEAL-BIOVENTUS TRANSACTION: HIGHLIGHTS On July 16, 2020 Elron announced the signing of definitive agreements for an investment in CartiHeal Announcement and an option to acquire CartiHeal by Bioventus LLC Transaction • A $15-20M investment in CartiHeal at a pre-money value of $180M, of which $1
Slide 22: Timeline
TIMELINE Statistical report of Investment final trial results PMA by Bioventus Expected: End of submission $100M in 7/2020 2021 to FDA FDA approval revenues Bioventus exercises break- CartiHeal CartiHeal up right Sellers CartiHeal Elron’s Sellers Elron’s $30M payment to share: share: CartiHeal PUT $
Slide 23: Electrical Stimulation-Based Treatment for Ischemic Stroke
ELECTRICAL STIMULATION-BASED TREATMENT FOR ISCHEMIC STROKE The annual number of new ischemic strokes in the USA is approximately 700,000. The current treatment for stroke is very limited. ESTABLISHED: 2000 In Mar. 2018 the company completed the largest Based on the clinical $31M stroke trial ever do
Slide 24: Realizing Value from Our Assets
REALIZING VALUE Our holdings based on Book value at Holdings in companies 1 valuation of last FROM OUR ASSETS: June. 30, 2020 ($m) financing round 2 ($m) In August we received Medical: $5m in cash from the BrainsGate (27%) 2.1 secondary sale of a portion of our shares CartiHeal (27%) 1.7 in IRONSCAL
Slide 25: Exits at a Value of $1.5B
EXITS AT A VALUE OF $1.5B Our share in proceeds $570M Acquired by COVIDIEN Sold to ROCHE Sold to PALO ALTO Sold to Sold to Sold to NETWORKS ENABLENCE WAVE Sold to Sold to Sold to BRUKER MICROSOFT SYSTEMS Sold to CORP ALVARION VOLCANO ZOLL May June Sept. Nov. Nov. Feb. Sept. Oct. July Apr. 2010 2010
Slide 26: Summary
~$276M SPECIALIZING IN EARLY-STAGE Total cash balance & investments INVESTMENTS in existing companies Led by a team with a proven value-creation track record; leveraging on Rafael’s tech capabilities 10 EXITS SUCCESSFUL SHIFT TO SUMMARY in recent years SOFTWARE/CYBER INVESTMENTS MEDICAL DEVICE INVES
Slide 27: Thank You.
THANK YOU. elron.com
Slide 28: Our Cyber/Enterprise Software Companies
OPENLEGACY ALCIDE SIXGILL OUR CYBER/ ENTERPRISE Automated API integration 23% Devops to production Cyber intelligence SOFTWARE platform that speeds digital by RDC Kubernetes security 30% platform that automatically & 23% COMPANIES transformation Our investment: platform Our investment: covertly anal
Slide 29: Our Medical Device Companies
CARTIHEAL BRAINSGATE POCARED Implant for Electrical Rapid and cartilage and stimulation- automated 10% OUR bone 29% based 30% microbiology by Elron & RDC regeneration treatment laboratory MEDICAL in load- for ischemic system DEVICE bearing Our investment: stroke Our investment: Our investment: $87m