Israeli co Innovid agrees SPAC merger at $1.3b valuation

Zvika Netter  / Photo: Innovid
Zvika Netter / Photo: Innovid

The ad delivery and measurement platform will merge with ION Acquisition Corp. 2.

Israeli ad delivery and measurement platform for connected TV Innovid, today announced it has entered into a definitive merger agreement with ION Acquisition Corp. 2 Ltd. (NYSE: IACB), a special purpose acquisition company (SPAC) at a company valuation of $1.3 billion. The merger is scheduled to close in the fourth quarter of 2021 and the merged company called Innovid will trade on Wall Street.

As part of the deal, ION Acquisition Corp 2, which has already raised $253 million, will be supported by $150 million of PIPE financing anchored by major institutional investors including Fidelity Management and Research Company LLC, Baron Capital Group, Vintage and others including funds affiliated with ION and Phoenix Insurance, for total capital of $403 million. Of this amount $163 million will go to Innovid shareholders who are selling shares, $200 million to the company's coffers, and $40 million for expenses for this process. The merger is being conducted at an 8.5 multiple of Innovid's expected revenue of $130 million in 2022. After the merger, Innovid's shareholders will retain a 64% stake in the merged company.

Founded in 2008, Innovid is a leading independent software platform that provides critical technology infrastructure for the creation, delivery, and measurement of TV ads across CTV, mobile TV and desktop TV. As the only ad server purpose-built for TV, Innovid developed the first CTV SDK on the market. As the $200 billion dollar TV industry continues to shift to CTV, the company is positioned to take a leadership role in a significant and high growth market.

Innovid has raised $95 million to date from investors including Goldman Sachs, New Spring Capital, Sequoia Capital, and Vintage. The company was founded by CEO Zvika Netter, Tal Chalozin and Zack Zigdon and has 365 employees including 85 in Israel.

Netter said, "Innovid is entering an exciting new chapter of growth as a public company, a major milestone that corresponds with rising adoption and demands for streaming television. The rapid shift of viewership from linear TV to streaming has driven marketers to make CTV a strategic investment focus. Our technology was purpose-built for TV which has allowed us to win in the marketplace and contributed to our rapid growth to date."

He added, "As a public company, we expect that we will be able to build on our leading market position, accelerate the growth of our business, and remain the independent platform trusted by the world’s largest TV advertisers. We are proud to have built an independent and neutral software platform to allow advertisers to create, deliver and measure digital TV ads and aim to continue to provide the industry a market leading and transparent offering independent of the large technology walled-garden players who dominate many other parts of the digital world."

ION CEO Gilad Shany said, "We believe Innovid has built an exceptional platform for digital TV advertisers to assist them as they transition $200 billion of TV advertising budgets to the world of digital TV. We are excited to partner in bringing Innovid to the public markets to provide the appropriate capital structure and shareholder base to enable Innovid to lead this market as an independent company. We were looking to merge with an exceptional company with roots in the Israeli hi-tech ecosystem and Innovid’s incredible achievements speak for themselves The combination of long-term partnerships built by the company throughout the CTV and OTT industry, their strong relationships with the largest TV advertisers in the world, unique ad serving technology and focus on a usage-based software business model, allows Innovid to provide significant value to the digital TV advertising ecosystem while also achieving attractive unit economics as the company grows."

Innovid had revenue of $69 million in 2020, of which 40% came from smart TV, 43% from mobile and 18% from PCs. Revenue was $59 million in 2019. 2021 revenue is expected to reach $95 million. The company had a net loss of $700,000 in 2020, compared with a net loss of $7.1 million in 2019.

Published by Globes, Israel business news - en.globes.co.il - on June 24, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Zvika Netter  / Photo: Innovid
Zvika Netter / Photo: Innovid
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