Big Story 10

Israeli adtech firm IronSource sees revenue of $900 million in 2019

TEL AVIV (Reuters) - Advertising technology firm IronSource, one of Israel’s most valuable private technology companies, expects to double revenue in 2019 and is seeking acquisitions valued at hundreds of millions of dollars.

FILE PHOTO - Xu Xiaoping (R), Chinese delegation head and founder of the ZhenFund seed fund and New Oriental Education & Technology Group, listens to Israeli high-tech firm ironSource's CEO Tomer Bar Zeev during a presentation at the company's offices in Tel Aviv April 28, 2014. REUTERS/Nir Elias

IronSource, which provides developers a platform to acquire users and display ads within mobile phone games, said its strategic decision of recent years to focus on the mobile gaming industry had paid off.

“Right now we are on a run rate of finishing 2019 with $900 million in revenue,” co-founder and Chief Revenue Officer Omer Kaplan told Reuters.

“Gaming is the market everybody is going into,” Kaplan said, pointing to initiatives such as Apple’s Arcade subscription service and Google’s Stadia for streaming games.

Facebook and Google dominate the digital ad market but their growth has stalled, according to a study by mobile apps tracking firm AppsFlyer covering the second half of 2018.

Gaming provides growth opportunities and there is evidence IronSource is gaining ground in the sector.

Though AppsFlyer’s study found Palo Alto-based AppLovin has established itself as the best network for gaming apps beyond Facebook and Google, IronSource is gaining ground having “almost doubled its market share, surpassing Unity Ads ... with the 4th largest piece of the pie,” the report said.

IronSource, which employs 780 people including 50 in China,

plans several acquisitions in the next couple of years, focused on analytic technologies and other features that would add value to its platform.

It is evaluating acquisitions of tens of millions to hundreds of millions of dollars.

“We think there will be a lot of consolidation in this market,” Kaplan said.

In terms of growth and profitability, he said, the company is ready to go public, but the timing of an offering remains to be seen. Its value well exceeds $1 billion according to market estimates.

“For adtech it is still a good question what is the best timing,” Kaplan said. “There will be a few companies that will go public in 2019 and 2020 and we will go when we feel the timing is right.”

Reporting by Tova Cohen; Editing by David Holmes