Hailo could be heading for huge Wall Street IPO

Hailo team credit: Hailo
Hailo team credit: Hailo

The Israeli AI chipmaker could command a double figure billion dollar valuation due to the "Nvidia effect," says a Wall Street investment executive.

With global investors focusing attention on the AI sector, Israeli AI processor developer Hailo could be heading for a huge Wall Street IPO.

Hailo, which was founded in 2017 by CEO Orr Danon, CTO Avi Baum, and Hadar Zeitlin, has developed advanced AI chips for edge devices. These chips have a unique architecture that bring the advantages of the accelerated processing of AI to edge devices at a fraction of the power consumption and cost of conventional AI processors, and without the need to connect to cloud-based AI services.

Initially focusing the video processing market for supporting autonomous driving, the company still operates in the sector. A few months ago, it even announced the winning of a significant production contract, in which its AI processors will be integrated into driving assistance systems in new car models from Chinese manufacturers.

Although seen as an auto-tech company, a sector pushed to the side in recent years, Hailo is first and foremost an AI chip company that provides processors to the security, computer, smart industry and other markets. The company has over 250 employees and provides products to more than 300 customers around the world.

These figures make it an AI company "ripe" for an IPO/acquisition by any capital market criteria, but so far Hailo has chosen to ignore the strategic opportunities presented, and focus on business development.

The company has to date raised $350 million, at a time when young Chinese chip manufacturer in the field currently raises two to four times this amount.

Hailo also maintains obsessive business secrecy. Although its products are known and appreciated among professionals, most of its announcements are low-profile, about new deals with suppliers. Along the way, rumors have surfaced of billion-dollar acquisition offers from industrial giants, which were rejected outright.

But recently even Hailo has had a tough time ignoring the business storm whipped up by the "Nvidia effect" in the industry. This can be seen in several interesting moves announced by the company in recent weeks. At the beginning of June, for example, it announced the supply of its processor to British company Raspberry PI, which will attach Hailo chips as an AI kit to its compact computer board.

Raspberry Pi is well-known and respected by engineers, developers and tech people worldwide, partly due to a "social" business policy, which provides developers with motherboards at a popular price. Raspberry's product, with Hailo's AI chip in it, costs only about $70 to the consumer, so it is doubtful that there is much money in the deal for Hailo. But since it is Raspberry, the move has gained global exposure, and along the way proved the Israeli company's ability to offer products to markets of tens of millions of units, and not just a few hundreds or thousands.

The second development that could support a planned IPO is Hailo's appointment of Yaron Garmazi as the company's CFO and COO. Garmazi is a high-tech veteran and one of his specialties is leading companies to a sale or IPO. Among other things, he took part in the IPOs of the Israeli companies Ness Technologies, Noga-Tech, DSPC and Passave. His appointment follows that in May of former Bank Leumi CEO Rakefet Russak-Aminoach as chairperson, and may also indicate preparations plans for an IPO.

Insiders insist that an IPO is not currently on the agenda, but an Israeli who works in a senior position at a Wall Street investment firm told "Globes," "Nvidia's crazy rise in value is currently generating a global tsunami among investors. A company like Hailo, with unique and mature AI products and a large customer multi-sector base, could hold an IPO today at a valuation of $12-15 billion dollars, and take off from there. But of course, no one knows whether and to what extent the trend will continue in the long term."

If Hailo does indeed hold a flotation in the current atmosphere, and realizes expectations for a double-digit billion dollar value, this would be good news for a long list of investors from Israel's auto-tech industry, who invested in Hailo at the start. Among them are Delek Motors, which owns about 10% of Hailo's shares, Carasso Motors, Meir Group, Automotive Equipment Group and other vehicle importers.

Published by Globes, Israel business news - en.globes.co.il - on June 24, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Hailo team credit: Hailo
Hailo team credit: Hailo
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