On the same day that two Israeli-founded adtech startups, Taboola and Outbrain, announced a merger to create a $2 billion company, another Israel-founded company focusing on advertising and marketing for mobile has also closed a huge funding round. IronSource, which has built a video ad network and user acquisition technology for mobile app publishers, has raised between $400 million and $450 million in funding. The money is coming from investment giant CVC, which is getting a minority stake in the business in this deal, valuing the company at over $1 billion.
The company is not being specific on the exact amount raised, describing it only as over $400 million. Israeli media yesterday reported that it would be a $450 million deal to value the company at around $1.55 billion. However, we have confirmed with the company that these numbers are in fact not accurate.
Alongside the merger of Taboola and Outbrain, ironSource’s investment underscores a couple of important trends. First, Israel continues to churn out some significant big data startups that are using their technology specifically for marketing and advertising ends. Second, we’re seeing a collective effort from a number of smaller (but strong) businesses to challenge the biggest tech players currently in the industry, namely Google, Facebook and Amazon, who dominate both in desktop and mobile advertising (and by association, marketing, as advertising is often used as the building block for marketing campaigns).
On the part of ironSource, the company said it’s on track to make $1 billion in revenue this year, and it is profitable (and has been from early on, when it was raising much more modest sums from a low-profile list of investors that is understood to include Viola Ventures, 83North and Leonard Blavatnik, the man behind Access Industries).
'œAs one of the world's most respected private equity firms, CVC has a track record of successfully partnering with companies to drive global growth,' said Tomer Bar Zeev, CEO and Co-Founder of ironSource, in a statement. 'œAs such they are the perfect partner for this next phase in our journey, as we continue to scale internationally, engage with A-class partners and invest heavily in building out our offering for game developers.'
The company has a core focus on gaming apps, and as these have become a perennial favorite for mobile consumers — mobile gaming is expected to generate revenues of $180 billion by 2021, ironSource says — ironSource’s business has grown, too. Its customers and partners include software, app and game developers with the list including the likes of EA, Zynga and Kongregate.
'œWe're witnessing the creation of a sector, gametech, which supports this growing ecosystem, with tailor-made tech solutions such as advertising, marketing, analytics, market intelligence, CRM and more,' said Bar-Zeev. 'œOur continued investment in this industry is part of a wider goal to be the go-to partner for any game developer looking to scale their game business.'
While that is a big and well-served area of the industry, what perhaps makes ironSource more interesting and unique is that it couples the tech it sells to developers with technology and services for mobile networks and device makers by way of its Aura solution, which helps them with engagement and content distribution to help them build alternative revenue streams on their networks. IronSource said this technology is integrated on more than 120 million mobile devices globally as of today.
'œWe are delighted to be partnering with such an innovative and exciting technology business,' said Daniel Pindur, Partner at CVC Capital Partners, in a statement. 'œThe investment in ironSource is a unique opportunity to support a well-respected founder-led organization to accelerate its growth. We look forward to working with Tomer Bar Zeev and his team to take the company to the next level.'