One of the most common causes of road accidents is distracted driving. What can distract drivers? A smartphone, for example.

To fight the use of cell phones while driving, legal authorities in many countries are toughening up laws, while car manufacturers are improving their car safety systems. Today we will talk about SaverOne 2014, the company that is trying to increase the level of road traffic safety by developing hi-tech solutions. SaverOne 2014 is planning to go public on 27 April by listing on the NASDAQ under the "SVRE" ticker symbol.

What we know about SaverOne 2014

SaverOne 2014 Ltd. is an Israeli IT company that is engaged in creating, developing, and selling innovative solutions in the field of auto safety.

The company developed a system that can identify and control smartphones located next to drivers. For example, the system bans distracting applications to prevent the driver from using them while steering the car.

Business of SaverOne 2014
Business of SaverOne 2014

SaverOne 2014 develops solutions for both new and used cars, as well as the OEM market. The system for the secondary market vehicles is scheduled for launch this summer, while the solution for the OEM segment is announced for 2025.

Business of SaverOne 2014
Business of SaverOne 2014

SaverOne has raised $26.6 million in funding from Ronen Weisberg, Ituran Location and Control, Universal Motors Israel, and Y.D.

Business of SaverOne 2014
Business of SaverOne 2014

What are the prospects of SaverOne’s target market?

According to the research report for 2020 provided by Market Research Future, the global auto safety driving market might reach $25 billion by 2027. As a result, the average annual growth rate could be 8.72%.

Experts name two key factors for target market growth. The first one is the improvement of technological capabilities to meet consumers’ growing requirements for motor vehicle safety, while the second factor is the increasing demand for safer driving from the owners of motor car parks.

Other factors that might boost the auto safety driving market are the global use of artificial intelligence and machine learning, as well as further improvements to the 5G wireless network with higher capacity and shorter delays.

SaverOne’s key competitors are:

  • Cellcontrol
  • Katasi
  • Cipia Vision
  • Lytx

How SaverOne performs financially

At the time of the IPO, the issuer had not generated net profit, which is understandable for hi-tech companies at an early stage of their development. We will therefore analyse the company's financial performance with its revenue.

In 2021, the company’s sales were $450,000, representing a 41.42% increase in comparison with 2020. This is quite an impressive result, although it is not huge compared to larger corporations.

Financial performance of SaverOne 2014
Financial performance of SaverOne 2014

The issuer’s net loss in 2021 was $26.49 million – this is a 51.32% increase in comparison with 2020. The main reason for this loss is a 77.99% increase in R&D expenses, up to $18.85 million.

As of 31 December 2021, SaverOne’s total liabilities were $2.2 million, and the cash equivalents on its balance sheet were $4.4 million – this implies a negative cash position of $7 million in 2021.

Strengths and weaknesses of SaverOne 2014

The advantages of investing in this stock are the following:

  • High revenue growth rate
  • The company is investing in product development
  • Strategic development plan
  • Prospective target market
  • All-in-one solution
  • No major competitors

The risk factors of investing in SaverOne 2014 shares are:

  • Relatively low revenue
  • No net profits

What we know about the SaverOne 2014 IPO

ThinkEquity is the only underwriter of the IPO. SaverOne 2014 is planning to sell 1.39 American depositary shares (ADS) at the price of $7.22 per share, meaning the gross revenue might reach $10.04 million. If the IPO is a success, the company’s capitalisation might be about $15.8 million.

Since the company doesn’t generate net profit, to assess its prospects we use a multiplier – the Price-to-Sales ratio (P/S ratio). The issuer's P/S value is 201.49, which means that buying SaverOne 2014 shares is a classic venture investment. This is why one should not invest more than 1% of the portfolio in this IPO to mitigate the risks involved.

Material is prepared by

Vadim has a higher education in finance and economics. He started becoming familiar with financial markets in 2012, and now specialises in analysing IPOs and portfolio investments.