Online advertising company IronSource is considering an IPO on NASDAQ, and is in preliminary talks with investment bank Goldman Sachs. The company is considering launching at a valuation of $5-6 billion.
The valuation would ultimately be set based on investor interest as well as a road show that would be conducted at a later stage.
IronSource is one of Israel’s biggest independent internet companies, employing some 1,000 workers in Israel and abroad. It is currently valued at $1.7 billion and has been profitable for more than a decade.
An IPO in 2021 would come as a surprise, as the company carried out a secondary transaction with the private equity fund CVC only a year ago, with CVC buying 25% of the company’s shares.
IronSource’s founders chose to bring in CVC to create liquidity for the most senior investors, and to keep managing IronSource as a private company for several more years. But it seems like the banks’ eagerness to publicly launch technology companies benefiting from the pandemic swept up some of the investors as well, who are now considering taking advantage of the momentum. Sources close to the company say no final decision has been made yet.
IronSource was founded in 2010 and its main focus is mobile advertising, primarily via game apps. The company’s product distributes targeted ads for tens of thousands of apps.
Developers embed IronSource’s product into their apps and create targeted ads within their games. They can also use IronSource as a platform to advertise themselves within other apps. The advertisements themselves are more advanced than just simple banner ads, and may include a short amount of game time or an interactive video, for instance.
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IronSource’s main competitors are Facebook and Google, which hold a duopoly on the global online advertising market, and it is well-placed against two other major online advertisers – Unity, which currently trades at a market cap of $31 million, up $1.3 million from its IPO in September, and AppLovin, which is said to be planning an IPO for 2021.
IronSource has already paid back its investors significant sums: Besides the secondary deal with CVC, which brought in $450 million, the company has distributed dividends totaling $312 million between 2014-2018. Investors invested a total of $103 million in IronSource since the company’s founding.
The founders, which include IronSource’s founders and those of companies it acquired over the years, still hold about half of IronSorce’s shares. Aside from CVC, other notable shareholders include Viola Ventures (10%), Disruptive, 83North, Leumi Partners, Seven Ventures and Clal Industries.