Online ad firm Taboola to go public on Wall Street at $2.6 billion valuation

Israeli content recommendation platform says it will list on New York Stock Exchange via Israel-based SPAC later this year

Luke Tress is a JTA reporter and a former editor and reporter in New York for The Times of Israel.

Illustrative: Traders at the New York Stock Exchange, March 17, 2020. (AP Photo/Mark Lennihan)
Illustrative: Traders at the New York Stock Exchange, March 17, 2020. (AP Photo/Mark Lennihan)

Israel’s Taboola, a content recommendation platform used by online advertisers, said it has made a deal to go public on the New York Stock Exchange.

Taboola expects to go public in the second quarter of 2021 at an implied valuation of $2.6 billion, according to a statement posted to the company’s website on Monday.

The firm is going public by merging with ION Acquisition Corp. 1, a public special purpose acquisition company, or SPAC.

SPACs are shell companies that aim to raise capital by going public, then merge with and into an existing company, in a process that is generally easier and quicker than a traditional initial public offering. SPACs have been around for decades but have been a major market trend in the past year.

ION Acquisition Corp. 1, part of ION Asset Management, is an Israeli firm that raised close to $260 million in its IPO last year with the goal of merging with an Israeli tech company. It has $259 million in trust and trades under the ticker IACA.

The boards of both Taboola and ION unanimously approved the agreement, which now needs approval from the shareholders of each firm and to pass regulatory requirements.

The deal is backed by major mutual fund investors including Fidelity and BlackRock. Taboola has raised some $285 million from institutional investors.

Taboola uses machine learning to match internet users with news articles, blogs, videos, apps, products and other content they will likely find interesting. It places so-called “chumbox” blocks of ads on sites with content that is sometimes derided as clickbait.

It is used by advertisers, publishers, mobile carriers and other companies to increase engagement and monetization of their audiences and operates on websites, devices and apps.

Companies advertising with Taboola pay it when users click on links, and Taboola shares the revenue with the companies that host the link.

The company says it is the world’s leading discovery platform, reaching over 1.4 billion individuals a month, or 44.5% of the world’s internet users. It works with over 10,000 publishers and brands, including CBS, Fox, USA Today and NBC, it says.

Taboola said it took in close to $1.2 billion in revenue and $34 million in operating income last year.

Taboola said it expects to have $600 million in cash and cash equivalents after the deal with ION goes through, and plans to invest over $100 million in R&D programs in 2021. The company has previously raised $160 million and had $240 million in cash or cash equivalents at the end of last month.

Last year Taboola announced an agreement to merge with Israeli rival Outbrain, but the deal fell through, partially due to the pandemic. Outbrain is reportedly looking to go public on Wall Street at a $2 billion valuation. (Disclaimer: The Times of Israel uses Outbrain for advertising.)

Taboola was founded by CEO Adam Singolda in Israel in 2007. It has offices worldwide and is now based in New York.

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