February 28, 2019
Micha Kaufman
Chief Executive Officer
Fiverr International Ltd.
8 Eliezer Kaplan St.
Tel Aviv 6473409, Israel
Re: Fiverr International Ltd.
Draft Registration Statement on Form F-1
Submitted February 1, 2019
CIK No. 0001762301
Dear Mr. Kaufman:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form F-1
Summary Consolidated Financial and Other Data, page 10
1. Please revise to present the most directly comparable GAAP measure with
equal or
greater prominence to your non-GAAP measure of adjusted EBITDA margin.
Refer to
Item 10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the
Non-GAAP
Compliance and Disclosure Interpretations.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview
Our business model, page 57
2. Please present comparative information for each of the measures provided
such as active
Micha Kaufman
FirstName LastNameMicha Kaufman
Fiverr International Ltd.
Comapany NameFiverr International Ltd.
February 28, 2019
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buyers, gross merchandise value, and take rate, for all periods
presented.
Buyer acquisition strategy, page 59
3. Please revise your disclosures to address the following as it relates
to your discussion of
time to return on investment:
How marketing expense applicable to new user acquisitions is
determined;
To the extent that the information used in this calculation is not
based on GAAP
information, indicate as such and explain how the calculations
differ from GAAP;
Provide comparable information for another cohort period or
clarify that the cohort
information may not be representative of every year; and
Tell us whether management uses this information in managing your
business or
assessing performance.
Key financial and operating metrics, page 61
4. Your definition of active buyers includes buyers who have ordered a
Gig in the last 12-
month period, irrespective of cancellations. Please tell us whether
the historical level of
cancellations is material and if so, how you determined that
presenting a measure of active
buyers irrespective of cancellations is an indicator of your ability
to attract and engage
buyers.
5. You disclose that a key factor in attracting and retaining buyers is
your ability to attract
and retain high-quality freelancers. For all periods presented, please
disclose the
number of active sellers who have sold at least one gig or explain why
the company does
not view this measure to be material to investors.
Results of Operations
Year Ended December 31, 2017
Revenue, page 63
6. We note that your revenue is primarily comprised of transaction fees
and service fees.
Please explain the difference between the two types of fees and
specifically describe the
nature of the services from which you earn services fees. Also, please
quantify the
revenue derived from each.
Business
Our market opportunity, page 72
7. You estimate your total market opportunity within the United States to
be approximately
$100 billion based on data of all U.S. businesses in certain
categories that have no paid
employees and are subject to federal income tax. Please disclose the
material assumptions
underlying your estimate and explain why you believe that entirety of
the income
generated by these smaller self-employed businesses constitutes your
addressable market.
Micha Kaufman
FirstName LastNameMicha Kaufman
Fiverr International Ltd.
Comapany NameFiverr International Ltd.
February 28, 2019
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Please also explain the basis for your belief that your opportunity
outside the United
States is even larger than our opportunity within the United States
given the overall size of
global markets outside the United States.
Management
Executive Officers and Directors, page 91
8. Please revise this section to disclose the business experience of your
directors and
executive officers. Also, you disclose on page 111 that certain of
your shareholders had
rights to appoint members of your board of directors. Please disclose
in this section any
arrangement or understanding with major shareholders pursuant to which
any person was
selected as a director. Refer to Item 4 of Form F-1 and Item 6.A. of
Form 20-F.
Consolidated financial statements
Note 2: Significant accounting policies
l. Revenue, page F-10
9. Please revise to clarify the following information:
The judgments you use to determine a transaction is complete;
Whether any buyer acceptance of a seller's service is required to
complete a
transaction; and
Whether buyers are entitled to a refund of any amounts paid,
including the prepaid
amounts recorded as a user account liability in your balance
sheet. If so, please
disclose your accounting policy for such refunds.
v. Recently issued accounting pronouncements not yet adopted, page F-13
10. Please clarify when you intend to adopt ASC 606. In this regard, your
disclosure indicates
that the effective date of the standard is for interim and annual
periods beginning after
December 15, 2018; however ASU 2015-14 requires nonpublic companies to
adopt the
standard for the annual reporting period beginning after December 15,
2018 and interim
periods beginning after December 15, 2019.
Note 6: User accounts, page F-16
11. Please clarify whether you consider any of your cash or bank deposit
balances to be
restricted as to withdrawal or use to satisfy the buyers' payments to
the sellers or the
payment of the sellers' fees upon the completion of a transaction. If
so, please present
these amounts separately on your balance sheet and revise your
footnotes to describe the
restrictions on the usage of this cash. Refer to ASC 210-10-45-4(a),
Item 18 of Form 20-F
and Item 5-02(1) of Regulation S-X.
12. You state that funds collected from buyers are held in escrow until
they are released to the
seller. To the extent certain funds are restricted to satisfy user
account obligations, please
Micha Kaufman
FirstName LastNameMicha Kaufman
Fiverr International Ltd.
Comapany NameFiverr International Ltd.
February 28, 2019
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clarify whether you have legal ownership over such funds. Also, tell
us how you
determined that the funds collected, as well as the user account
obligations, should be
reflected on your balance sheet. Provide the accounting guidance
considered to support
your conclusions.
Note 10: Shareholders' equity
b. Share based compensation, page F-19
13. Please disclose the fair value of the underlying ordinary shares (or a
range of values) for
each period presented as this appears to be a significant assumption
used in determining
the grant date fair value of the awards. Refer to ASC
718-10-50-2(f)(2).
14. Please provide us with a breakdown of all options granted in fiscal
2018 and to date in
fiscal 2019, and include the fair value of the underlying common stock
used to value such
awards as determined by your board of directors. To the extent there
were any significant
fluctuations in the fair values from period-to-period, describe for us
the factors that
contributed to these fluctuations, including any intervening events
within the company or
changes in your valuation assumptions or methodology.
General
15. You state on page 45 of the registration statement that you had users
in North Korea.
Additionally, the Fiverr.com website identifies sellers from Sudan.
North Korea and
Sudan are designated by the U.S. Department of State as state sponsors
of terrorism, and
are subject to U.S. economic sanctions and/or export controls. Please
describe to us the
nature and extent of any past, current, and anticipated contacts with
North Korea and
Sudan, including contacts with their governments, whether through
subsidiaries, affiliates,
partners, customers or other direct or indirect arrangements.
16. Please supplementally provide us with copies of any graphical
materials or artwork that
you intend to use in your prospectus. Upon review of such materials,
we may have
comments. For guidance, consider Question 101.02 of our Securities Act
Forms
Compliance and Disclosure Interpretations.
17. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Rebekah Lindsey, Staff Accountant, at (202) 551-3303 or
Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 if you have questions
regarding comments
on the financial statements and related matters. Please contact Matthew
Crispino, Staff Attorney,
at (202) 551-3456 or Jan Woo, Legal Branch Chief, at (202) 551-3453 with any
other questions.
Micha Kaufman
Fiverr International Ltd.
February 28, 2019
Page 5
Sincerely,
FirstName LastNameMicha Kaufman Division of Corporation Finance
Office of Information Technologies
Comapany NameFiverr International Ltd.
and Services
February 28, 2019 Page 5
cc: Marc Jaffe
FirstName LastName