On the heels of raising a $60 million round at a $1 billion valuation in November 2013, Instagram competitor Mobli today is announcing another finance move: it is joining the NASDAQ Private Market, the U.S. stock exchange’s new marketplace aimed at private companies that are either trying to raise money or provide liquidity for existing investors, and want to turn to a wider pool of investors, beyond VCs, to do it.
When NASDAQ launched the Private Market earlier this week, it said that around 15-20 companies signed so far and have identified about 500 more that could be a good fit — at the time it hadn’t disclosed any names. That makes Israel/U.S.-based Mobli possibly the first (or one of the first) to announce its intention to join the market. NASDAQ’s Greg Brogger told our own Kim-Mai Cutler that the ideal company would be raising between $20 million and $50 million on the platform.
But in Mobli’s case, the move is coming not to raise funds, but to provide some liquidity to its existing investors that have backed the company with some $86 million. They include Carlos Slim, the Mexican billionaire who led the last round; private investor (and Mobli chairman) Kenges Rakishev; and celebrities Leonardo DiCaprio, Tobey Maguire, Serena Williams and Lance Armstrong. The app — on iOS and Android, as well as Windows Phone — lets users take and post pictures and videos with people connecting with each other around hashtags, pre-defined channels and locations, as well as social networks.
“At Mobli we have a lot of private investors who are approaching us and it’s a great place for existing shareholders to trade,” CEO Moshe Hogeg tells me. “The company doesn’t need more financing.”
He says that Mobli had been assessing different marketplaces such as SecondMarket for listing. NASDAQ approached Mobli a few months ago, he said, and they were swayed by its reputation. (That, in itself, is an interesting fact and could point to challenges for rivals as marketplaces like these become a more commonplace alternative for startups looking for more flexible financing but not yet ready or interested in going public.)
“We wanted to work with the biggest and most experienced one. Companies like SecondMarket are great but many do not know the credibility of them. NASDAQ is great in that way,” he says.
While joining these secondary markets are a way for startups to get more liquidity for investors and raise funding from a wider pool of investors — any broker accredited to trade on NASDAQ can trade on the Private Market — it will still require Mobli to disclose more of its finances, even if it’s not to the same level as a publicly-traded company. To join the program, companies need to have raised at least $30 million over the past two years, or have at least $50 million in enterprise value; or they need to be profitable, with at least $750,000 in net income.