Esh Bank Seeks NIS 150 Million Capital Raise at NIS 500 Million Valuation
Following the collapse of acquisition talks with Isracard, Esh Bank is launching a NIS 150 million funding round at a NIS 500 million valuation to prepare for its public launch.
Four months after the collapse of acquisition negotiations with Isracard, Esh Bank is launching a capital fundraising round of 150 million shekels at a valuation of 500 million shekels, matching the valuation set under the failed deal.
Controlling shareholder Nir Tzuk is expected to inject the majority of the capital. Concurrently, the bank is holding meetings with institutional entities, including insurance companies, to bring in a strategic partner for its banking operations. The required investment amount was determined by the Bank of Israel in alignment with the bank's operational plans.
Background on Failed Isracard Deal and Ownership Structure
In March, Isracard signed a memorandum of understanding to acquire Esh Bank for 400 to 500 million shekels, alongside an additional 120 million shekel investment in the bank's separate technology company at a 380 million shekel valuation, structured primarily through a share exchange. The current fundraising round excludes the technology company.
Esh Bank's ownership structure includes founders Yuval Aloni, who serves as CEO, Alex Liberent, and Shir Raanan, who collectively hold 45% of the shares; Nir Tzuk with 20%; Alon Schein with 10%; former Israel Securities Authority chairman and bank chairman Shmuel Hauser with 5%; Clal Insurance Enterprises Holdings with 5%; and bank employees and private holders holding 15%. In the upcoming capital raise, Tzuk is expected to significantly increase his stake while diluting other shareholders.
Market Entry and Wider Lean Banking Sector
Esh Bank received its banking license from the Bank of Israel at the end of 2022, with founders signaling an intent to open operations to the general public in the first quarter of 2026. The bank plans to offer checking accounts, credit products, and financial services to households and small businesses, alongside sharing 50% of its interest income with customers.
The bank hopes that pending legislation allowing institutional entities to hold stakes in lean banks will facilitate institutional participation. This capital infusion is necessary to enable the bank to extend expanded credit upon launching its public services. Esh Bank represents one of three lean banking initiatives aimed at boosting sector competition, alongside Revolut Israel—which recently received a conditional banking license—and the operational First Digital Bank (One Zero), which currently serves 200,000 customers and is similarly seeking institutional investment.
