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March 28, 2019
Micha Kaufman
Chief Executive Officer
Fiverr International Ltd.
8 Eliezer Kaplan St.
Tel Aviv 6473409, Israel
Re: Fiverr International Ltd.
Amendment No. 1 to Draft Registration Statement on Form F-1
Submitted March 18, 2019
CIK No. 0001762301
Dear Mr. Kaufman:
We have reviewed your amended 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.
References to prior comments are to those in our letter dated February
28, 2019.
Amendment No. 1 to Draft Registration Statement on Form F-1
Prospectus Summary, page 1
1. In response to prior comment 5, you noted that you do not view the
number of active
sellers as a meaningful metric. Given your disclosure that your platform
had more than
830,000 sellers since inception and "hundreds of thousands of sellers"
in 2018, it appears
that additional context regarding the number of active sellers in 2018
may be helpful to an
understanding of the company's business and revenue that you generated
from these
sellers. Please revise.
Micha Kaufman
FirstName LastNameMicha Kaufman
Fiverr International Ltd.
Comapany2019
March 28, NameFiverr International Ltd.
March 28, 2019 Page 2
Page 2
FirstName LastName
2. We note your response to prior comment 6 regarding the nature of
transaction and service
fees and the amount generated from each in the last two fiscal years.
Please include this
information in the registration statement. In addition, clarify
whether the transaction and
service fees are paid by the buyer, seller or both.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Buyer acquisition strategy, page 60
3. We note your response to our prior comment 3. Please also address the
following:
Clarify what the acronyms SEO and SEM stand for in your definition
of performance
marketing investments.
Revise to explain that the marketing expenses used to calculate tROI
exclude out of
home advertising and describe the other excluded fixed costs.
Explain why certain costs are excluded from your performance
marketing investments
and related tROI calculations.
Clarify that the marketing expense used in this calculation is not
the same as
marketing expense determined under US GAAP for the purposes of
income statement
classification.
Disclose whether there are any limitations on the use of the metric.
4. The chart presented on page 61 appears to compare the cumulative
revenue for a specific
cohort period to the performance marketing investments made during the
initial cohort
period. Please clarify whether any additional marketing costs are
incurred in subsequent
periods to maintain and grow the cohort group, and if so, explain how
such costs are
factored into your analysis. To the extent subsequent marketing costs
are excluded from
your analysis, please explain why.
Liquidity and Capital Resources, page 67
5. Your discussion of operating cash flows appears to be a recitation of
changes disclosed on
the consolidated statement of cash flows. Please revise and expand
this discussion to
include the primary drivers of, and other material factors necessary
to understand, the
company s cash flows from operating activities. Refer to section IV.B
of SEC Release 33-
8350.
Consolidated Financial Statements
Consolidated Statements of Cash Flows, page F-7
6. Please explain why the change in user funds is classified as an
operating cash flow while
the change in bank deposits is classified as an investing activity
when both amounts relate
to funds held from buyer prepayments. In your response, please address
the following:
How the agreement with the payment service provider would impact
the classification
of such funds as an operating cash outflow.
Micha Kaufman
FirstName LastNameMicha Kaufman
Fiverr International Ltd.
Comapany2019
March 28, NameFiverr International Ltd.
Page 3
March 28, 2019 Page 3
FirstName LastName
How you determined the classification for the change in user
accounts as an operating
cash flow.
Specifically address whether you have any contractual obligations
to remit the user
funds to satisfy the buyers purchase or sellers fees and if so,
how that factored into
your classification within the statement of cash flows.
Please provide the guidance considered in ASC 230 that supports the
classification for
each of the user funds, bank deposits and user accounts.
p. User funds and user accounts, page F-13
7. We note your response to our prior comment 11. Given the nature of the
funds, please
clarify why your stated intent would be different in fiscal 2018 after
you entered into an
arrangement with an existing payment service provider to hold buyer
funds than it was in
fiscal 2017. In this regard, please explain further why you did not
also reclassify amounts
paid by buyers in fiscal 2017 to the "user funds" line item.
Note 11: - Shareholder's equity, page F-24
8. Please reconcile your statement on page F-16 that protected ordinary
shares do not have
any participation rights and as such, the two class method of earnings
per share is not
required with your statement here that protected ordinary shares
participate in dividends.
Also, tell us why the protected ordinary shares are not included in
your weighted average
shares used to calculated basic earnings per share. We may have
further comment on your
presentation of pro forma earnings per share after reviewing your
response.
9. Please revise to disclose all conversion or other liquidation terms or
rights enjoyed by the
protected ordinary shares. For example, we note your disclosure on
page F-8 that all the
protected ordinary shares will automatically convert upon the closing
of your IPO. Refer
to ASC 505-10-50-3 and 6.
10. Please provide us with a breakdown of the sales of ordinary shares in
the secondary
market and include the date of each transaction, the price paid and
the fair value of your
ordinary shares at such time. Also, tell us whether the existing
investor who purchased
such shares is considered a related party.
General
11. You state in your response to prior comment 15 that revenues from
sellers in Sudan while
the comprehensive sanctions program was in place were immaterial.
Please address for us
the approximate amount, and materiality, of revenues from such sellers
during fiscal 2018
and the preceding and subsequent interim fiscal periods. Also, in
light of your past and
possible future dealings with persons in Sudan, please address for us
the potential impact
of the investor sentiment evidenced by divestment and similar
initiatives that have been
directed toward companies with operations associated with
U.S.-designated state sponsors
Micha Kaufman
Fiverr International Ltd.
March 28, 2019
Page 4
of terrorism.
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.
Sincerely,
FirstName LastNameMicha Kaufman Division of
Corporation Finance
Office of
Information Technologies
Comapany NameFiverr International Ltd.
and Services
March 28, 2019 Page 4
cc: Marc D. Jaffe
FirstName LastName