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United States securities and exchange commission logo
April 15, 2021
Dan Adika
Chief Executive Officer
WalkMe Ltd.
1 Walter Moses St.
Tel Aviv 6789903, Israel
Re: WalkMe Ltd.
Draft Registration
Statement on Form F-1
Submitted March 22,
2021
CIK No. 0001847584
Dear Mr. Adika:
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 submitted March 22, 2021
Risk Factors
Our Digital Adoption Platform is at the core of our business..., page 20
1. We note that your
Digital Adoption Platform is at the core of your business and that if
demand for this
platform declines, the demand for your other products will also decline.
Please revise here or
elsewhere to disclose the percentage of you revenue accounted for by
subscriptions to or
services related to your Digital Adoption Platform.
Dan Adika
FirstName LastNameDan Adika
WalkMe Ltd.
Comapany
April NameWalkMe Ltd.
15, 2021
April 215, 2021 Page 2
Page
FirstName LastName
Our Post-IPO Articles designate the federal district court..., page 58
2. We note that you discuss potential enforceability concerns related to
your exclusive forum
provision. Please revise here to also state that investors cannot
waive compliance with the
federal securities laws and the rules and regulations thereunder.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Our Business Model, page 76
3. You state that your customers included 154 of the Fortune 500 and 242
of the Global 2000
as of December 31, 2020. Please provide context regarding these
customers by clarifying
whether they are customers with ARR greater than $100,000 and/or ARR
of $1,000,000.
Customer Acquisition and Expansion, page 77
4. You note that you are focused on acquiring new customers and state
that you had
approximately 2,000 customers as of December 31, 2020. In order to
provide more
context to this disclosure, please revise to disclose your actual
number of customers as of
December 31, 2019 and 2020.
Customer Acquisition and Expansion, page 77
5. To provide context to your disclosure, please address the following:
Disclose the reasons why this metric provides useful
information to investors;
Discuss how management uses this metric in managing or
monitoring the
performance of the business; and
Explain whether, and if so how, cancellations are factored into
your ARR
calculations. For example, tell us whether the 2016 cohort group
excludes customers
that cancelled their subscriptions and if so, explain further how
this measure
represents your ability to retain and expand your customer
relationships.
Refer to Item 5 of Form 20-F and SEC Release No. 33-10751.
Key Business and Financial Metrics, page 78
6. We note that you present an ARR by cohort graph, the number of
customers with ARR
greater than $100,000 and a dollar-based net retention rate that
compares ARR from
customers in one period to ARR in a prior period. Please tell us
whether management
uses the ARR metric itself to manage the business and if so, tell us
what consideration you
have given to including a quantified discussion of ARR for each period
presented. Refer
to Item 5 of Form 20-F and SEC Release No. 33-10751.
Dan Adika
FirstName LastNameDan Adika
WalkMe Ltd.
Comapany
April NameWalkMe Ltd.
15, 2021
April 315, 2021 Page 3
Page
FirstName LastName
Non-GAAP Financial Measures, page 80
7. We note your disclosure of Free Cash Flow and Non-GAAP Operating Loss.
Revise to
disclose the comparable GAAP measure with greater prominence. Refer to
Item
10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the Non-GAAP
Compliance and
Disclosure Interpretations.
Business
Key Benefits of Our Digital Adoption Platform, page 102
8. We note that you commissioned a study prepared by Forrester
Consulting, which appears
to have included a survey of some of your customers. Please further
describe this survey,
including the number of customers surveyed, how these customers were
selected for the
survey and the response rate of surveyed customers. Please also file
as an exhibit the
consent of Forrester Consulting in accordance with Rule 436 of the
Securities Act.
Additionally, please revise your Market and Industry Data section to
note that you
commissioned this study.
Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
Cash and cash equivalents, page F-10
9. Please provide a breakdown of the specific types and amounts of cash
items and securities
included in cash and cash equivalents and short term deposits at
December 31, 2020.
Note 6. Convertible Preferred Shares, Shareholders' Deficit and Equity
Incentive Plan
c. Convertible preferred shares, page F-23
10. Please revise to disclose the specific circumstances related to actual
pricing of a Qualified
Public Offering that would cause the conversion rate of your preferred
securities to be
adjusted. Please also clearly disclose what constitutes a Qualified
Public Offering. Refer
to ASC 505-10-50-6.
f. Share option plan, page F-25
11. Please provide us with a breakdown of all share-based compensation
awards granted in
fiscal 2020 and 2021, including the fair value of the ordinary shares
used to value each
award. To the extent there was any significant fluctuations in the
fair values, describe for
us the factors that contributed to such fluctuations, including any
intervening events
within the company or changes in your valuation assumptions or
methodology. Please
continue to update this analysis through effectiveness of the
registration statement. Also,
disclose any share-based issuances subsequent to the most recent
balance sheet date and
the expected financial statement impact, if material. Refer to ASC
855-10-50-2.
Dan Adika
FirstName LastNameDan Adika
WalkMe Ltd.
Comapany
April NameWalkMe Ltd.
15, 2021
April 415, 2021 Page 4
Page
FirstName LastName
General
12. Please provide us with supplemental 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, have presented or expect to present to potential investors in
reliance on Section
5(d) of the Securities Act, whether or not you retained, or intend to
retain, copies of those
communications.
You may contact Rebekah Lindsey, Senior Staff Accountant, at (202)
551-3303 or
Christine Dietz, Senior Staff Accountant, at (202) 551-3408 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Mitchell Austin, Staff
Attorney, at (202) 551-3574 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Tad Freese, Esq.