Two Israeli venture capital funds sold their entire holdings in Earnix to two major shareholders: Erel Margalit of JVP and Liad Agmon of Insight Partners.

The deal is estimated to be worth between $120-$130million. IGP sold its shares for $70 million, a seven-fold return on investment. Vintage sold their shares for $50-60 million. The exact valuation is unknown, but it wasn’t higher than the value at which the transaction took place in 2021 when the company raised 75 million dollars at a valuation $1 billion and became a unicorn for first time.

Vintage and IGP were early investors in Earnix. They sold their shares when the funds they invested through had reached the end their lifecycle. This prompted the realization of investments to return the money to their investors. Private investment funds have a typical lifespan of seven years with the option to extend it to ten years. In the first three to four years, the funds make investments, then improve their companies. Then, in the last few years of the fund, the managers realize the investments, and distribute the money back to investors.

IGP, which is managed by former NICE Systems CEO Haim Shani, and former Microsoft Israel CEO Moshe Lightman, invested in Earnix during a $13.5 million fundraising round in January 2017. IGP’s investment in Earnix has been over seven years. Earnix had already raised $25 million in funding from investors such as JVP and Vintage. This made it an older investment. Insight, JVP and Earnix saw this as a chance to increase their stakes in the company.

In the last two decades, secondary transactions — the sale of shares in a private company by existing investors — have become more common. This is mainly because increased interest rates are intended to cool down inflation. However, they also reduce investors’ appetite for risky assets such as private technology companies. This has decreased the likelihood of exits via public offerings. This has also affected the mergers-and-acquisitions market by reducing the frequency of companies sold to other entities. This has boosted secondary transactions by allowing investors to realize their holdings or new investors to enter the business.

JVP was one of the early investors in Earnix, having made the initial investment in 2005 at Earnix’s 2nd fundraising round. Insight invested in Earnix for the first time in 2021 during the fundraising round which turned it into a unicorn.

Earnix is an unusual company within the Israeli technology scene. It was founded in 2001 and is a relatively old company, but it remains private. It is profitable, unlike many other technology companies. Earnix reported its first operating profit in 2023. Earnix’s revenue has crossed the $100 million mark for the first year. The company hopes to reach hundreds of millions in annual revenues within the next few years.

Earnix’s AI Dynamic Platform is used by the largest insurance companies in North America, Europe, and Asia. Its products allow insurance companies to underwrite faster, personalize financial and insurance products for customers, adjust prices, and maintain constant contact with customers. Earnix’s technology helps insurance companies reduce customer acquisition costs and increase profitability per client. It also optimizes pricing to boost profits. Earnix allows financial companies to gain insights into consumer preferences, consumption patterns, and changes in customer taste. This helps bridge the gap between supply and demand and market trends.

Earnix has clients in 35 countries, including the USA and Europe, East Asia and Australia. Its clients include Generali, the Italian financial corporation, Toyota’s finance arm, Tesco Bank and US Bank. Earnix charges its customers annual usage fees. Typically, agreements last between 3 and 5 years.

Robin Gilthorpe is the CEO of Earnix. He joined the company a little over a year ago, after spending 20 years in finance. Earnix employs 300 people across Israel, the USA and the UK. It was founded by Sammy Krikler, and Yoni Cherifetz, founders of the American-Israeli Software Company Demantra. Demantra was sold to American giant Oracle, in 2006.