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2016 IPO Prospects: ironSource Strengthening its Revenue Generating Capabilities

Posted on Friday, Mar 18th 2016

According to a BI Intelligence report, the US mobile app-install advertising market was estimated to be worth $4.6 billion in 2015. The market is expected to grow to $6.8 billion by 2019, translating to an annual growth rate of 14%. The report estimates that mobile app install ads accounted for nearly 30% of mobile ad revenue last year. Israel’s ironSource is hoping to take a big share of this market.

ironSource’s Offerings

Tel Aviv-based ironSource began its life as a developer of add-ons for the Firefox web-browser. In the next two years, the company pivoted into a mobile app distribution provider. Today, ironSource leverages its data-driven technology to provide developers, carriers, device manufacturers, and brands with the ability to better understand and communicate with their users. Its platform has seen more than 3.5 billion installs till date and records over 6 million new installs daily. The service is accessed by more than 450 million unique users across geographies, devices, and platforms each month.

Its core product is installCore, a market leading digital content delivery platform that helps developers in brands increase completed installs and traffic monetization, reduce download times, and improve user install experience while providing in-depth installation analytics. Other products include displayCore – a performance-based display distribution service, mobileCore – a distribution performance network for mobile applications, and mediaCore – a platform that optimizes media acquisition.

ironSource’s Financials

ironSource earns revenues by helping companies with the distribution and delivery of desktop and mobile apps. It has traditionally been a desktop-focused company but has also made strong progress on the mobile front, where it faces competition from bigger vendors like Google’s AdMob and Twitter’s MoPub. The company does not disclose detailed financials, but market reports suggest that it was trending at revenues of $260 million back in 2014 and was expected to end 2015 with revenues of more than $350 million. Breakout of its mobile and PC share are not known. ironSource is reported to be profitable.

ironSource has been venture funded so far with $105 million in investments raised from Access Industries and Saban Capital Group. Its last round of funding was held in February 2015 when it raised $20 million from Access Industries at a valuation of more than $1 billion. Last year, ironSource was also thinking of going public in the next year or two.

ironSource SuperSonic Merger

In 2015, ironSource announced its plans to merge with Supersonic a leader in mobile video advertising. SuperSonic is another Israel-based company founded by tech gurus Gil Shoham and Arik Czerniak. It is not as big as ironSource, but it has an impressive client list of names like Adidas, Intel, and Coca Cola among others. SuperSonic’s revenues were estimated at $70 million-$80 million for the year 2014. Prior to the acquisition, SuperSonic reported a user base of 550 million and 250,000 daily installs.

The merger will help the new entity leverage ironSource’s skills on monetization and SuperSonic’s skills on advertising to deliver end-to-end marketing services. ironSource will be able to integrate video advertising in the download process to deliver ads to users during the install process. Additionally, the two will provide running video ad campaigns, opt-in promotions, and other programs for mobile app developers and distribute them on mobile installation platforms like InstallCore. Terms of the deal were not disclosed, but analysts peg it to be worth $150 million-$300 million.

The acquisition will also help ironSource compete with bigger players like Google’s AdMob and Twitter’s MoPub that dominate the mobile ad server space.

This segment is a part in the series : 2016 IPO Prospects


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. Warby Parker Should Look Before Leaping
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. Apttus Bootstrapped First, Raised Money Later
. Fanatics Expanding Its Playing Field
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. Tanium Bootstrapped First, Raised Money Later
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