Online retail giant Amazon has expanded its agreement with the Israeli textile printer manufacturer and committed to spending $400 million in five years on Kornit’s digital technology and services. Amazon is a major shareholder in the NASDAQ-listed textile print business.
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| Kornit Presto industrial direct-to-fabric printer |
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| "A turning point for us": Ronen Samuel CEO Kornit Digital |
“The business is on fire – fashion companies are moving online and to textile printing on demand,” Kornit CEO Ronen Samuel told Israeli newspaper Haaretz. “The agreement marks a turning point for us – we will be a huge company. Our sales target of $500 million in 2023 will be achieved only through organic growth.’
Kornit completed its fourth share offering in 2.5 years and signed an expanded agreement that wiill reportedly triple its sales to Amazon.
“The funding round comes as shares of Kornit, which manufacturers digital printers used in the garment, apparel and textile industries, have soared 83% this year,” said the report. “Its digital printers can rapidly produce short runs of complex images and designs directly on finished garments and fabrics, enabling clothing makers to produce products as needed, rather than pre-stocking inventory at the start of each season, and/or create custom products.”
Kornit is issuing two million new shares worth $124 million while a unit of Amazon, which owns 4.75% of Kornit, is selling 1.6 million of its shares for another $100 million, according to the report.
Samuel told Haaretz the proceeds from the Kornit portion of the share sale would give the company cash it needs to leverage sales growth it has enjoyed due to the coronavirus pandemic, make acquisitions and to enter new market segments.
“Amazon committed to buying products and services from Kornit totaling $400 million over the next five years. The commitment is divided into two – $250 million in existing products (digital printers, inks and services) in exchange for warrants convertible into 1.9 million shares, and $150 million in future products in exchange for warrants for 1.5 million shares. The warrants will be allocated in tranches each time Amazon hits a $5 million milestone for purchases.”
Kornit Digital develops, manufactures and markets industrial digital printing technologies for the garment, apparel and textile industries, including digital printing systems, inks, consumables and software. Founded in 2002, Kornit Digital is headquartered in Israel with offices in the USA, Europe and Asia Pacific, and customers in more than 100 countries.
