AOL Acquires Israeli-formed Startup for Whopping $405 Million

The sale is the second big exit for Israeli serial entrepreneur Amir Ashkenazi.

Send in e-mailSend in e-mail
Send in e-mailSend in e-mail

Israeli serial entrepreneur Amir Ashkenazi scored a second hit Tuesday after the U.S. Internet company AOL said it agreed to buy for $405 million.

AOL said it would pay $322 million in cash and another $83 million in AOL stock for the California-based startup, in a deal that is expected to close in the third quarter of this year.

Co-founded in 2006 by Ashkenazi and Chief Product Officer Teg Grenager, is a platform for buying and selling digital video advertising. The sale is his second big exit after, an e-commerce site that was acquired by eBay in 2005 for $620 million. Although’s vice president for eningeering, Nir Yeffet, is an Israeli, unlike many U.S. startups formed by Israelis, the company does not conduct research and development in israel.

Since its founding has raised $48 million from venture capital funds, including Israel’s Gemini Ventures, Spark Capital, Bessemer Ventures and Redpoint Ventures of the United States. The American business magazine Inc. reported that's revenues for 2011 were $33.4 million, a stunning 5,872% increase from 2008, when they stood at only $560,000. Inc. reported the startup had 85 employees in 2012. AOL said supported 26,000 global ad campaigns last year on approximately 9,500 different websites.

The acquisition by AOL, the company whose $400 million acquisiton of an the online chat startup ICQ in 1998 helped spark the Israeli high-tech boom, is part of the company's effort to become the leading platform in the online video industry and invest further in the broader field of digital advertising. will operate as an independent unit in AOL's video group, which is run by company senior vice president Ran Harnevo, an Israeli, and formerly CEO of Israeli startup 5min Media.

AOL's 2010 acquisition of 5min for $65 million turned digital video into a growth area for the company. Last year, AOL chairman and CEO Tim Armstrong estimated that the company would reach revenues of $100 million per year in the field.

A woman walks out of AOL offices in New York in this November 19, 2009 file photoCredit: Reuters

Click the alert icon to follow topics: