IT Services Company Matrix Continues to present impressive growth figures, and it ended 2021 with a jump of about 13% in net profit, to about NIS 195 million. The company, managed by Moti Gutman, updates that about 4% of Matrix’s annual profit, NIS 7.8 million, is attributed to its subsidiary Infinity Labs, in which Matrix reported over the weekend the sale of most of its shares (45.2%) to the investment fund. WHICH Led by Zehavit Cohen.
Infinity Labs operates in the market of KosherWorkers in high-tech professions. In the past year, which was a record year for Israeli high-tech, it was one of the fastest growing training industries, thanks to two main factors: the first is the growing demand from start-ups and unicorns for working hands in Israeli high-tech, with an official shortage of 14,000 development workers. But it is estimated that the real number is even higher.
The second factor is the demand from workers to integrate into the high-tech industry, due to the excellent public relations that the technology industry has enjoyed in the past year, with the promise of high wages, diverse and satisfying careers, and also due to increasing openness to workers with no technological degree or background.
The growing demand for training is reflected in the value of Infiniti Labs in the transaction, which was set at NIS 375 million, so that upon completion of the transaction, Matrix will record a capital gain before tax of NIS 160 million gross (including revaluation of the holding balance of 4.9%). Matrix plans to distribute the full amount as a dividend, and the main beneficiary of the dividend will be the controlling shareholder Formula, which holds 48.7% of Matrix shares. At the same time, it will stop consolidating the results of Infiniti Labs in its reports.
Infinity Labs was founded by Matrix in 2014, and Matrix owns it in partnership with executives, Haim Garon and Stephen Harari. The company is engaged in training programs for the technological world. The programs are designed for trainees who are outstanding university graduates, mostly from the exact sciences, and the training is designed to enable them to gain experience in the technologies required in the worlds of digital, mobile, embedded systems and data science.
At the end of six months of training, they are placed to work for clients – high-tech companies and start-ups – and at the end of a certain period, they are hired to work there. Matrix previously reported that with the eruption of the corona in March 2020, Infiniti Labs shifted all training activities to a distance learning model, while maintaining the recruitment, training and sales process sequence, regardless of geographical location, and thus developed tools and methodologies that could assist it in future development abroad. .
The Infiniti Labs website states that its method is “the only teaching method that will really put you in the most prestigious positions in high-tech.” According to the website, over 220 high-tech companies, start-ups and development centers already employ more than 1,500 Infinity Labs graduates, “and return every week to continue recruiting our track graduates for positions that require 2-3 years of experience.”
The company notes that their training track includes a teaching method that offers intensive and in-depth learning of the principles and architecture of the content world and work environment, high-level project execution and mentoring by professional mentors. The company currently offers two training tracks – software development and DevOps, and is expected to soon also offer a cyber research track.
A few months ago, Infiniti CEO Haim Gron told Globes that “studies look like a workday at a start-up, 12-14 hours a day, as part of teams. At the end of the program, they do not fall short of employees with two to three years of experience. “
According to Garon, only 12.5% of those invited to screenings are eventually accepted into the curriculum itself. Asked what Infiniti Labs is looking for in the candidates, he replied: “Elements of excellence, realistic vision, English. A person who excels in everything, constantly, with the ability to recover quickly.” When asked how much the graduates of the program earn, Garon said that after two years they will earn NIS 24,000-30,000, or at least NIS 10,000 more than the previous job.
Infiniti’s website contains recommendations from a number of customers, including the companies Tufin, Unitronics and Cardo. The company won, along with many other companies, a tender from the Innovation Authority for training and rapid names in the high-tech professions, which was published “in response to the employment crisis in the economy that erupted following the Corona epidemic.”
“Expect a growing need in the hot technological fields”
Matrix, which sells in the transaction, operates in five areas: information technology solutions and services in Israel, information technology solutions and services in the United States, marketing and support of software products, cloud and computing infrastructure, as well as training and implementation.
The company, which is traded at a value of NIS 5.5 billion, after a 115% jump in the stock in three years, showed a 13% increase in revenues in 2021, to NIS 4.36 billion. The main activity, information technology solutions and services in Israel, accounted for 54% of revenues, and in 2021 grew by 2% to revenues of NIS 2.4 billion, with an improvement in operating profitability. Operations in the US grew at the dollar level, but the strengthening of the shekel hurt the results, and operating profit eroded.
The annual EBITDA (profit excluding interest, tax, depreciation and amortization) of Matrix amounted to NIS 477 million, an increase of 15.3% compared to 2020.
Motti Guttman, CEO of Matrix, said, “We are summing up 2021 with an all-time record in all financial indicators. The company expects the economy to continue recovering from the corona crisis, following a growing need for a variety of services and solutions in the hottest technological areas today: digital, cloud, cyber, data and operational core systems, areas in which Matrix leads the technological market in Israel, and will continue to lead. “
Guttman estimated that the accelerating trend of the move to the cloud and As a Service payment models, which began during the corona period, and that it will even increase in the coming years, will continue, which will increase the company’s ARR (annual recurring revenue). “The Matrix is expected to integrate into national projects of the government and the defense sector, such as the Nimbus project, which is planned to accelerate the adoption of the cloud in the public sector as well as in the health and finance sectors,” Guttman noted.
Impressive exits at Global Island, Zap and Max
The acquirer of Matrix shares in Infinity Labs, an AMI fund from the Apax Funds Group, has been investing in medium-sized companies in Israel since raising in 2015 about half a billion dollars from institutional entities in Israel and around the world. Among the successful investments the fund has made so far, in which impressive exits have been recorded, are the technology company Global-E, the Internet company Zap and the Max product chain. In contrast, an investment that did not go well was made in the collapsed catering company Schultz.
Infinity Labs
Line of Business: Engaged in training programs for the technological world and for the placement of graduates of the program in high-tech companies
history: Founded in 2014 and owned by the founders – Matrix, Haim Garon and Stephen Harari
data: The company is located in Ramat Gan and according to its data, over 220 companies employ more than 1,500 graduates of the program. Value in the transaction – NIS 375 million. Infinity Labs is responsible for approximately 4% of the annual net profit attributed to Matrix shareholders – ie approximately NIS 7.8 million