The Israeli online content-recommendation company Taboola is conducting negotiations to merge with ION group’s special-purpose acquisition company listed in NYSE, Haaretz has learned. ION SPAC is a public shell company that raised $259 million to find and merge with a private firm.
In October, the company made an initial public offering for its SPAC, with the declared intention of purchasing an Israeli unicorn - a tech company valued at over a billion dollars.
The SPAC is led by Jonathan Kolber, Gilad Shany, Avrom Gilbert and Anthony Reich. If everything goes according to plan, Taboola will be listed on Wall Street through the merger. Both ION and Taboola refused to comment on the report.
In such a merger, Taboola is expected to receive access to the SPAC’s funds and may lead another investment round in what is termed private investment in public equity (PIPE). After the merger is authorized by stakeholders, Taboola will become a public company and its shares will begin to be traded.
The choice to head to Wall Street came three months after the collapse of the highly anticipated merger between Taboola and its biggest competitor - the Israeli online content-recommendation company Outbrain.“There’s no company with revenues of $100 million that’s not considering going public, especially in today’s market,” a source close to Taboola told Haaretz this week.
Last year, Taboola founder Adam Singolda told us about his desire to take the firm public. “Taboola is a company that deserves to be public like Wix,” he said about the Israeli website building firm valued at $15 billon. “It is part of a new generation of Israeli companies that are evergreen and I want to be part of them,” he said in April 2019.
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Taboola is a player in a business segment called “native display” that integrates advertising with editorial content. Its recommendations are a familiar feature at the bottom of online stories tagged as “from the web” or “you may be interested.” The company has created real competition against Google and Facebook and has signed up many of the world’s major publishers as customers.
Taboola’s business model is to split profits with publishers, who for the most part get a 60 percent cut. In the case of the biggest publishers, the company will typically guarantee revenues in exchange for getting content-recommendation exclusivity.
Taboola is profitable on an operating basis and generates revenues of around $150 million a year (after sharing profits with publishers).
Adam Singolda, its founder and CEO, said several months ago that the past year had been a banner one, despite the coronavirus pandemic – better than the past three years combined.
Taboola weighing going public through the SPAC route reflects the fact that the ad-tech industry has earned a reputation among investors over the last few years as very risky. Many companies have gone under since the start of the decade. Taboola was founded in 2007.