Spring Ventures in 2025: Cheap on the screen, still waiting for proof

Getting to Know the Company

At first glance, Spring looks like a tiny Israeli micro-cap with a strange market price: roughly ILS 45.6 million of market value, against ILS 81.2 million of equity and ILS 57.7 million of current assets. But anyone reading it like a software operating company is reading the wrong business. Spring is a very small technology investment platform, with 5 employees, and its economics are driven mainly by fair-value marks, exits, fund distributions, and FX, while service revenue remains peripheral.

What is working today? The balance sheet. Spring ended 2025 with ILS 10.0 million of cash, ILS 47.2 million of listed securities, ILS 27.7 million of private technology funds and companies, and no meaningful financial debt. What is still messy? Much of that value is not fully accessible to common shareholders yet. Part of it sits in private holdings marked at fair value, part depends on the UK market, and part is highly sensitive to the dollar and sterling.

That is also the active bottleneck. Spring’s problem is not financial survival. It is value capture. The screen looks cheap, very cheap. If one takes year-end cash and listed securities at book value and subtracts all liabilities, the result is roughly ILS 52.5 million, more than the market value at which the shares traded in early April 2026. Put differently, the market is still assigning negative value to the private portfolio and the operating shell. That can be an opportunity, but it is also a clear vote of distrust.

That is the right early filter. Anyone looking for an operating business with a repeatable revenue engine will not find it here. Anyone looking for an asset screen, a strong liquidity cushion, and optionality around value realization will. The real debate is whether 2025 was the start of a genuine rerating, or simply a year in which the UK public market and a few favorable marks gave Spring a temporary tailwind.

The quick economic map looks like this:

This chart captures the real shift. Spring entered 2025 less as a cash-heavy vehicle and more as a listed-portfolio vehicle. The decline in cash and the increase in listed securities are not a technical detail. They show that the company deliberately moved its center of gravity from passive liquidity toward a more volatile public-market layer, but one with daily price discovery and much better monetization potential.

Another point worth understanding early: Spring’s private book is not truly broad. Roughly ILS 21.0 million out of ILS 27.7 million, about three quarters of the fair value, sits in just two funds, Journey and Wellborn. That is not necessarily a flaw, but it does mean the debate over whether the private book is real or overstated will largely revolve around those two holdings, not around the direct startup basket.

Events and Triggers

The first trigger: 2025 was the year the UK move stopped being just a structural story and started becoming an earnings story as well. The Spring Next Tech subsidiary, formed in March 2024 and active from July 2024, expanded during 2025. At the same time, CEO Aviv Refua now devotes most of his time to this activity and works from the UK subsidiary’s offices. That is not an organizational footnote. It is a statement about where management wants the next leg of value creation to come from.

The second trigger: the public portfolio became the main earnings engine. The fair value of listed technology funds and companies jumped to ILS 15.1 million from only ILS 3.2 million at the end of 2024. Within that, Molten alone reached ILS 9.7 million of value after a cumulative gain of about 66%, and contributed ILS 4.37 million of profit in 2025. For perspective, that single contribution was larger than the company’s full-year net profit of ILS 3.42 million.

The third trigger: the private book sent mixed signals. On the positive side, Journey rose to ILS 13.1 million after a further ILS 2.58 million investment and a ILS 995 thousand fair-value increase. Wellborn rose to ILS 7.9 million and paid a ILS 1.65 million dividend. On the negative side, the direct private-company basket barely moved, with only ILS 11 thousand of fair-value uplift, while the Ember exit ended in an ILS 833 thousand loss.

The fourth trigger: the company also marked what did not work. In December 2025 it decided to stop developing a software asset intended for internal use or sale and wrote off the full ILS 534 thousand carrying value after concluding it would not be able to use or monetize it. The balance-sheet impact is not large, but it is a useful reminder that in technology even small in-house projects can evaporate quickly.

That mix matters. Spring did not turn itself into a pure venture-capital vehicle. It built a hybrid layer: meaningful exposure to listed technology investment vehicles on one side, and bonds, money-market funds, and other funds on the other. That raises liquidity and reduces concentration versus a narrow private bet, but it also leaves a meaningful part of the bottom line exposed to public-market mood swings.

Efficiency, Profitability and Competition

The wrong way to read 2025 is to say Spring “improved profitability.” This is not a normal operating company that sold more product or structurally widened margins. The real story is that the operating shell still loses money, while the profit comes almost entirely from the investment layer.

Service revenue did improve, rising from ILS 747 thousand to ILS 1.06 million, but that is still very small against ILS 5.26 million of G&A, ILS 1.15 million of finance expense, and ILS 384 thousand of other net expense. Without the ILS 10.55 million line of investment gains and finance income, there is no net profit here, only a loss-making shell.

That leads to the second point. Earnings quality in 2025 leaned more on valuation uplift than on recurring operating economics. Profit from listed securities totaled ILS 7.37 million, while fair-value gains in the private portfolio came to ILS 2.34 million. The other direct holdings, Visionary, Deskfirst SAFE, and Liberty Pixel, barely helped the year. In practice, almost all of the private-portfolio uplift came from Journey and Wellborn, while the direct-investment basket also included the loss on the Ember exit.

That matters because Spring is trying to present a blend of direct investments, private funds, and a public portfolio. In 2025, that model worked mainly through the funds and the public market. That is not necessarily bad. If anything, it is probably the more realistic model for a company this small. But it does mean investors should be careful not to overread 2025 as proof of broad-based investment capability.

The half-year split sharpens the picture further. The first half was basically flat, ending with a tiny pre-tax loss of ILS 47 thousand. The second half alone generated ILS 4.37 million of pre-tax profit. Anyone looking only at the full-year figure might think Spring has built a stable earnings trend. In reality, 2025 depended heavily on a very strong second half and a public market that was especially supportive to the listed book.

Another important yellow flag comes from the auditor’s report. The key audit matter was not cash flow, not leverage, and not going concern. It was the fair valuation of illiquid financial instruments, ILS 27.7 million at year-end. That does not mean there is an accounting problem. It does mean the private layer is the central interpretive challenge in this story. Anyone bullish on Spring ultimately also needs to be comfortable with the valuation methodology and with the pathway from private marks to real cash.

On competition, Spring has no product moat. It has a judgment, access, and capital-allocation moat. That is a weaker moat than a classic operating moat, especially in a company with 5 employees and very high dependence on one key person. That is precisely why the market still prices Spring more like a volatile micro holding company than like a full-multiple investment platform.

Cash Flow, Debt and Capital Structure

To read Spring correctly, the cash framing has to be explicit. The relevant framework here is all-in cash flexibility, not “normalized cash generation.” In a company like Spring, net income does not tell you how much cash the business retained, because a large part of earnings comes from non-cash fair-value movements.

That makes the core cash-flow story of 2025 very simple: the company earned ILS 3.42 million, yet operating cash flow was negative ILS 2.18 million. Why? Because there were ILS 5.76 million of non-cash net income items, mainly ILS 7.37 million of gains on listed securities, partly offset by a positive ILS 168 thousand working-capital effect. Put differently, the income statement looked better than the cash account.

That is not necessarily a serious warning sign. An investment platform can absolutely show this kind of gap. But it is an important reminder: Spring’s cheap screen is not currently supported by a classic operating cash engine. It is supported by a relatively liquid balance sheet and by the possibility of future value realization.

On the investing side, 2025 included a further ILS 2.58 million investment into Journey, net purchases of ILS 1.41 million of listed securities, and ILS 1.87 million of proceeds from private realizations, including ILS 1.03 million from Ember and ILS 842 thousand of receipts from Wellborn. After all that, cash fell from ILS 14.79 million to ILS 9.96 million.

The good news is that there is barely a leverage story here at all. The company has no meaningful bank debt, uses no hedging derivatives, and all financial liabilities mature within one year. Current lease liability stood at only ILS 264 thousand. Total lease cash payments were ILS 504 thousand, of which ILS 482 thousand was lease-principal repayment and ILS 22 thousand was interest expense. This is a very light capital structure.

From a balance-sheet standpoint, the most important number is this: current assets stood at ILS 57.68 million against current liabilities of ILS 2.50 million, which means working capital of ILS 55.18 million. If one narrows the screen to just cash and listed securities and subtracts all liabilities, the cushion is still about ILS 52.5 million. Against a market value of roughly ILS 45.6 million, that remains a very strong flexibility profile.

Still, that flexibility is not immune to market risk. Some ILS 56 million of assets are denominated in or linked to foreign currency, mainly the dollar and sterling, and the company does not hedge. So even the liquid layer is not pure balance-sheet cash. It is cash plus a securities portfolio exposed to market prices and FX.

Outlook

Before discussing 2026, four findings matter most:

• Finding one: even after the report, the market is pricing Spring below its liquid layer. That is why the stock screen looks cheap.
• Finding two: 2025 was a good earnings year, but it leaned heavily on Molten, a stronger public market, and an unusually strong second half.
• Finding three: the direct private book still has not proven itself as a repeatable value engine. Almost all of the private-portfolio uplift came from Journey and Wellborn.
• Finding four: even on an accounting basis, the company still does not have enough visibility to recognize a tax asset on roughly ILS 26 million of carried-forward tax losses in Israel and about GBP 0.8 million in the UK.

That leads to the obvious conclusion: 2026 looks like a proof year, not a breakout year. Spring has already shown that it can keep a strong balance sheet and build a screen that looks cheap. It still has not shown that the gap will close through realizations, distributions, or repeatable returns on equity.

Management itself is clearly pointing toward further expansion in the UK and further investment in listed technology funds and companies. That makes sense. The report describes the UK as Europe’s leading venture-capital market again in 2025, with a deeper pool of capital, grants, and deal flow. For a company as small as Spring, accessing that ecosystem through a local subsidiary and listed investment vehicles may be a more efficient way to source opportunities.

But there is a tradeoff. As Spring shifts more weight toward the UK and toward the public market, it becomes less dependent on waiting for a single private exit, which is a positive. On the other hand, it becomes more exposed to market beta, FX, and investor sentiment toward listed technology investment vehicles. In other words, Spring is improving liquidity, but not really reducing volatility.

That is probably what the market is testing now. The question is no longer whether the company has assets. That is already clear. The question is what kind of assets these really are. Cash and listed securities are accessible value. Fair-value marks on private funds and companies are value that still needs another step. So even if the screen looks cheap, the discount is not guaranteed to close on its own.

For the thesis to strengthen over the next 2 to 4 quarters, at least one of three things needs to happen. First, fresh proof from the private portfolio, through an exit, a meaningful round, or another distribution that validates the book. Second, preservation of the liquidity cushion even if the UK public market stays volatile. Third, continued reasonable returns from the public portfolio without Molten remaining the only real story.

What would weaken the thesis? A sharp reversal in the UK market, a stronger shekel versus the dollar or sterling, disappointment in the private-fund layer, or another year in which Spring keeps booking gains without converting them into cash. That is exactly where a cheap screen can turn into a value trap.

Risks

The first risk is valuation risk. ILS 27.7 million of the balance sheet sits in level-3 private technology funds and companies. The company’s valuation framework may be reasonable, and the auditor did review it closely, but this is still the layer where changes in assumptions, comparable transactions, or portfolio companies’ funding ability can materially alter the picture.

The second risk is FX and market risk, and it is bigger than it first looks. The company has about ILS 56 million of assets exposed to the dollar and sterling, and it does not hedge. A 10% move in the dollar translates into about ILS 3.11 million of P&L impact. For sterling, 10% means about ILS 2.34 million. Those are numbers close to the full-year net profit.

The third risk is funding risk at the underlying portfolio companies. The report itself stresses that 2025 remained more selective, both in Israel and in Europe. That means that even if listed investment vehicles rerated, earlier-stage private companies still operate in a more discriminating capital market. At Spring, that matters because part of the value depends on funds like Journey and Wellborn continuing to enhance and eventually monetize their holdings.

The fourth risk is managerial concentration. The company employs only 5 people and explicitly identifies Aviv Refua as a key person. That is not boilerplate. In a company of this size, capital allocation, market access, and execution of the UK strategy sit in the hands of very few people.

The fifth risk is the gap between created value and accessible value. Even if Spring’s economic NAV is materially above the market cap, public shareholders do not really benefit until there is a distribution, a sale, or at least a clearer validation that the marked value can be monetized. Until that happens, the discount can persist.

Conclusions

Spring ended 2025 as a much cleaner balance-sheet story and a much clearer strategic story than it looked a year earlier. The market still refuses to grant full credit, and on a screen basis there is logic to that. But 2025 also showed that earnings still depend mainly on fair-value marks, FX, and a supportive public market, not on a self-funding operating engine.

That is the core of it: what supports the thesis is the large gap between market value and the liquid asset layer. What blocks it is that private value and accounting value have still not been converted sufficiently into accessible value. In the near term, market interpretation will depend mainly on whether 2025 was the start of a realization path, or just a good year for marking assets higher.

Current thesis: Spring looks very cheap on the screen, but it is still an investment platform that needs to prove realization and stability, not just valuation uplift.

What changed: the combination of a larger listed book, Molten’s contribution, the Wellborn dividend, and a full-year profit has made the story less defensive and more offensive.

The counter-thesis: the market may simply be right, because the private layer is hard to monetize, earnings are too volatile, and the company is too small to force a discount to close.

What could change the market reading: a fresh exit or distribution from the private book, another quarter or two of preserving a high liquidity cushion, or evidence that the UK strategy produces repeatable returns rather than a one-off rerating.

Why this matters: Spring is interesting precisely because it tests whether a very small investment company can create a lot of value and then actually turn it into cash that common shareholders can access. That answer is still open.

What must happen over the next 2 to 4 quarters: more proof on private valuations, continued balance-sheet discipline, and profitability that is not dependent on one single listed name. What would damage the thesis is a reversal in the UK market or another year in which the gains remain mostly on paper.