Israel's Hola Sells Majority Stake in Business Unit at $200m Valuation

Luminati is used by companies to gather intelligence via a proxy IP network

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Ofer Malinski, the brain behind hola!
Ofer Vilenski, the brain behind HolaCredit: Itzik Ben-Malki

The Israeli startup Hola Networks agreed Thursday to sell a majority stake in its Luminati business-intelligence platform to the British private equity fund EMK Capital in a deal that values Luminati at $200 million.

The two sides didn’t provide further details except to say that Ofer Vilenski and Derry Shribman, the founders of Hola Networks, will retain a “significant stake” in Luminati and that Vilenski will continue as CEO.

Luminati is the business wing of Hola Networks, which provides virtual private network services to its users through a peer-to-peer network.

When users access certain domains based on their geographic location, the Hola application redirects the request to computers and internet connections of other users in non-blocked areas via a virtual private network, circumventing the blocking.

For example, this lets users in China get around government censorship of websites, or lets people see Netflix films blocked from their countries for commercial reasons.

In the case of Luminati, which Hola set up as a separate business three years ago, the application allows businesses to conduct business intelligence, such as price comparisons, without their rivals knowing and blocking access.

That’s because websites can recognize the viewer and adjust content, advertisements and prices based on the viewers’ geography, demographics and other information.

Luminati enables its enterprise customers, which include Fortune 500 companies, to access the internet through its network of over 40 million IP addresses for services like ad verification, brand protection, price comparison, fraud prevention, data collection and cybersecurity.

Hola was formed in 2013 by Vilenski and Shribman and has raised $30 million from Horizons Ventures, DFJ Tamir Fishman, Magma Ventures and others, all of whom are selling their Luminati stakes in the deal.

Hola will be keeping its non-enterprise business, both its VPN and Hola Spark, which is designed to improve the video experience of websites and make money from them.

London-based EMK was founded in 2015 by Edmund Lazarus and Mark Joseph, and raised 575 million pounds ($746 million) in May for new investments.