Kornit Digital Concludes a Successful IPO

On April 2, 2015, Kornit Digital Ltd. (KRNT) became a member of the Nasdaq stock exchange after concluding a successful IPO with 7.1 Million shares raising over $122 million. The newly minted stock closed at $14 or 40% over its opening price. Kornit Digital, which was founded in 2002 in Israel, develops and manufactures digital printing solutions for the textile and garment industries, from direct-to-garment print systems to roll-to-roll digital presses for fabrics. Kornit is based in Israel and has offices in the U.S., Europe, and Asia and now has customers in over 100 countries worldwide.

Kornit’s offerings include a range of products for entry-level, mid-range, and-high volume direct-to-garment solutions, such as the Kornit Breeze ($69,000), Kornit Storm II ($199,000), and the Kornit Avalanche Hexa ($425,000). The company also offers a digital system for roll-to-roll fabric printing, the Kornit Allegro ($500,000+).  In their financial brief the company cited $66 million in 2014 revenues, representing 34% growth over 2013. In the same brief Kornit noted that the installed base for all the company’s products is now nearly 1,300 units worldwide.

Kornit’s strategic focus, the digital printing of textiles, is an exciting corner of the industrial printing world. Designers and marketers throughout the massive garment and decorative fabric industries want to achieve mass customization of their products, and digital printing is the most viable route to that end. Kornit has been a successful supplier of this technology, thanks to a dedicated team of innovators, a network of dealers, and a support organization. Kornit’s own materials science experts have developed the company’s patented “NeoPigment” ink, and the company has also partnered with inkjet technology supplier Fuji-Dimatix for the Kornit products’ core inkjet printheads.

These development efforts ultimately have earned Kornit a strong value proposition: Kornit systems shorten producers’ cycle times by pre-treating and finishing printed fabrics, cutting total production time, simplifying processes, and allowing print providers to print customized runs of eye-catching, high quality garments and fabrics.

Kornit’s strength in the mid-range and high-end of the direct-to-garment market also sets it apart from competitors. Most companies with similar technologies have concentrated on the entry-level, table-top segment, with prices in the range of $15,000 to $30,000. Meanwhile, in addition to its direct-to-garment products, Kornit also entered the market for roll-to-roll fabric printing in 2013, an important expansion of its market reach from direct-to-garment into fabric printing and finishing market.

The combined direct-to-garment and roll-to-roll Kornit print systems extend the company’s overall reach into a market segment that, based on InfoTrends’ Digital Textile Market forecast, is growing at more than  30% compounded annual growth rate  from 2013 to 2018. InfoTrends estimates that the digital textile market had over $10 billion in print value in 2014, based on sales of over 800 million square meters of digitally printed fabric, as well as over 200 million direct-to-garment pieces used in apparel, décor and industrial segments.

This successful IPO signals that investors are have confidence in the young Israeli company and its products. After successfully growing its business for the past few years Kornit, among other vendors, is likely to continue the transformation of the textile printing industry for the foreseeable future.