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Israel-based IronSource closed an investment round of $80 million to $100 million from a consortium of 10 American, European and Asian investors, six months after IronSource called off a merger with Babylon, after the latter lost a key contract with Yahoo and Google. TheMarker reports.
The fundraising round values the online software distributor at $800 million. The biggest investor is The Disruptive Fund, led by serial entrepreneur Tal Barnoach.
The company plans to expand its offering and revenue streams through acquisitions before the planned IPO. IronSource has already hired Morgan Stanley and JPMorgan Chase its advisers for the IPO, in second quarter of 2015, which is estimated to have a valuation $1.5 billion.
Carmel Ventures, which held a 15% stake in IronSource, did not to join the current round.
Download Valley — the cluster of companies whose business model is to entice users to download free software — had been going through a rough patch in the last several months. Last week, two of these companies, Perion (Nasdaq:PERI: TASE:PERI) and Babylon (TASE:BBYL) reported bad news. Baylon said it would five back shareholders some 125 million shekels ($36 million) as a dividend because it couldn’t see how to justifiably spend the money on acquisitions or research and development.
Perion, meanwhile, slashed its outlook for the rest of 2014 and said it is shifting its focus away from desktop computers to the mobile market.
IronSource, whose CEO Tomer Bar-Zeev is a major shareholder, has been profitable and cash-flow positive, even distributing dividends. Last year, it had revenues of some $200 million, yielding an operating margin of 25%. It employs about 200 people at its offices on Tel Aviv’s Lillienblum Street.
Founded in 2009 by two brothers Tomer Bar-Zeev and Eyal and Roi Milrad, IronSource currently employs 370.
Its main product is installation software used by many of the world’s most popular downloading websites. Its InstallCore platform, handles over 100 million software installs per month, shortening download times and providing users with suggestions for software their computers may need.
It has enabled IronSource to offer distribution and installation services to other software developers.
IronSource declined to respond to the report.
