Ride-hailing app Gett is Zirra’s highest valued company in Israel for 2016, according to our latest ranking. Gett has accumulated a valuation of nearly $2 billion, after signing a $300 million partnership with Volkswagen and taking a loan $100 million from Sberbank. The partnership with the second largest car manufacturer will probably lead to a mutual partnership in VW’s new venture Moia, a spinoff company that will take care of all VW’s autonomous cars and delivery services enterprises.
As part of 2016 wrap-up, Zirra has ranked the 20 highest valued Israeli startups (see below) and the entire list of startups with an estimated valuation of $100 million and above (see at the bottom of this article). Going through these two lists, pay attention to companies who are ranking higher this year (Taboola, Kaltura, Payoneer), lower (Outbrain, Kaminario, IronSource) or those who have their first appearance on the list (Via Transportation, Landa Labs and Voyager Labs).
How Do We Value Companies?
The output of the Zirra Valuation Process is by no means a company’s real valuation. What we do is estimate the real-time valuation, as if the company had a stock traded on the public market, taking into account market momentum and industry characteristics, while excluding effects such as a tech bubble or PR and marketing campaigns.
The valuation process involves both Intrinsic and Relative valuation algorithms. The Intrinsic data includes revenue and expense estimations, traffic trajectories, advertising campaigns measurements, investment history and velocity, based on aggregated sources.
In the Relative analysis, data is compared and benchmarked with a database of thousands of companies with correlation to stage, space, size and trajectory. This produces a preliminary set of company ratings and valuation metrics. For example, the algorithm concluded that teams of up to 3 co-founders, each specializing in his/her field of business, technology or marketing leads to growth, whereas teams of 4 or more co-founders carry a higher degree of risk. The machine learning algorithms track the growth of companies, arrive at conclusions independently and dynamically adapt for future analysis.
We then produce a map of competitors based on the data set, rated by the degree of direct competition, its size, threat, and proximity of the shared customer and partner base. Results are sent to relevant experts that comment on both quantitative analytics (scores and metrics) and qualitative analytics (risks, opportunities, competitors).
Where do we get the data from?
Data is extracted from 85 different data sources, regularly updated (daily to weekly). Sources include both open and licensed directories such as the company website, Bloomberg, Linkedin, SimilarWeb and Adwords; It can be “derived data” such as Glassdoor reviews, consumer reviews, sentiment analysis from open web articles; or other data points such as academic researches, stock indexes, and macro-economic parameters.
At the end of 2015, Gett was just another ride-hailing with some excellent traction at Israel, Russia and a partial presence in London and New York. At the end of 2016 Gett is almost a different company, raising a total of $400 million and partnering with the second largest car manufacturer, Volkswagen. As of today, Gett is already active in 100 cities, most of them in Europe, and is operating a delivery service and a mass-transit system that turns black cars into ride sharing taxis.
After announcing their mutual partnership in May, the nature of the cooperation between VW and Gett was unclear. But a few weeks ago the two companies have agreed to share some news on the stage of TechCrunch Disrupt London. Volkswagen presented a new spinoff, Moia, that will take care of the complete VW’s value chain of mass-transit vehicles and autonomous cars delivery service. VW will design cars that will suit mass-transit and delivery needs, while Moia will manage and operate the fleet with an end-to-end service. Right after VW’s presentation, Gett launched its product: Gett Together, as service that competes with UberPool and allows passengers to share taxis and black cabbies with the cost of a Tube ticket.
Shahar (Dave) Waiser, CEO, and Co-Founder of Gett
Gett uses its good relations with taxi drivers and municipalities (something that cannot be said on Uber) to improve its services. For instance, Gett’s black cabs can drive Gett Together passengers on London’s bus lanes. That is what attracted VW to the Israeli company, as they both nurturing relationships with transportation companies, municipalities, and ministries, instead of fighting it.
But as Shahar Dave Waiser, Gett’s CEO admitted, the company does not have pretentions beyond Europe, at least for now. It landed a $100 million loan from Sberbank bank recently, but it was done mainly to help it grow in Russia and Eastern Europe countries. According to the bank, Gett is active in 57 cities in Russia, and that makes it almost 60% of Gett’s entire markets. Some other cities are in Israel and the rest of the UK.
Taboola and Outbrain
Taboola and Outbrain have shown healthy growth at 2016, proving that recommendation engines can produce enough space for at least two profitable companies. According to our ranking, Taboola grew faster, adding revenues, traffic, deployment and new hirings. Taboola acquired Convert Media that improved its native video offering and added many more clients, including AOL’s Huffington Post and TechCrunch. Its mobile presence has been improving dramatically. Outbrain, too, improved its profitability, landed $50 million and shares Microsoft as a common customer with Taboola.
Taboola and Outbrain Total Employee Count (Source: LinkedIn)
After nabbing $50 million from Goldman Sachs this summer, it is evident that Kaltura is as for today one of the largest video-as-a-service vendors for businesses. The acquisition of TVinci brought Kaltura into IPTV, making it one of the most active players in “Netflixing” the world, allowing telecom giants to start streaming VOD as if they were Netflix or Amazon. Katura also launched webcasting products, adding Cisco and Ericsson to the list of competitors.
IronSource is an online software distribution and monetization technology powerhouse providing a complete suite for desktop and mobile app developers. In a few clicks, app developers can get a full stack service of distribution, advertising, and monetization suite, allowing them to maximize their reach. The company grew thanks to its distribution engine for desktop applications, encouraging billions of users to download anti-virus software, utilities, and games. Later it added a mobile distribution suite and last year it acquired Supersonic, a video advertising platform inside mobile apps. Today, about 25% of its revenue is coming from the mobile activity.
The Supersonic deal brought IronSource to control 40% of all mobile video advertising market, but also broadened its foothold in the Silicon Valley and to China. Today, Iron serves the “BAT Trinity” in China: Baidu, Alibaba, and Tencent, in addition to Qihoo 360 and Cheetah Mobile. With the help of Chinese software developers, IronSource could also reach 400 million dollars in revenue and become one of the large exporters of Chinese apps outside of the continent. That is why the company is negotiating these days an acquisition deal with some Chinese private equity firms. Zirra had learned that IronSource is asking for about $1.5-$2 billion and that the probability of signing an agreement in the current situation is quite low.
The supersonic deal brought not only the Chinese market to IronSource but also a pack of shareholders willing to liquidate their shares. The original investors in Supersonic: Greylock Israel (changed their name to 83North and SAIF Partners sold a company but hadn’t seen much cash from it. Right now it seems more reasons can support a sale rather than oppose it, and that might have led Zirra algorithm to value the company at less than a $1B.
IronSource is still regulated under Google and Microsoft’s policy towards software distribution. Also, IronSource aspired to go to an IPO but shelved the plan due to harsh conditions in the adtech market. The majority of adtech companies that had gone public in the recent years are undervalued. The tech giants such as Google and Facebook as well lost interest in managing large M&As in the field, abandoning adtech to future areas such as automotive, AI, mixed reality and robotics. Also, fraud in advertising cooled the entire adtech industry.
IronSource Total Employee Count in Plateau, According to LinkdIn.
Voyager Labs Wants To Be The Palantir Of Public Opinion (11th, valued at $637 Million)
One of the biggest surprises of 2016 was Voyager Labs, a top-secret company that decided to emerge from stealth mode last month after two years in the darkness. It did so after completing few financial rounds that brought its total raised funds to $100 million from investors such as Oracle and Horizons Ventures. It is quite possible that the company decided that the product is ripe enough, to begin with, a PR campaign, helping it hire more employees and attracting customers.
But coming out of hiding didn’t make things clearer. The company is keeping most of its secrets in the dark, while CEO Avi Korenblum uses vague words to describe the practices of the enterprise. It seems that Voyager Labs is in the business of understanding public opinion in a way no company has been monitoring so far. Korenblum said that he wasn’t surprised by the results of the election in the U.S from the last November. He said that when analyzing public opinion, Voyager can learn not only what is being discussed on social networks, but also what matters to the public. Analyzing blogs and social networks, Voyager could say something about the public acceptance of Hillary Clinton’s version of the email controversy, and if the American voters are going to do something about that in the ballot box.
As the browser cookie is being abandoned in the mobile era, businesses are seeking solutions that will enable them to analyze and understand consumer behavior without violating their privacy.
Voyager Labs, founded by former Israeli intelligence community officers, developed an AI engine that uses deep-learning algorithms to extract real-time and tailored insights from publicly available unstructured data. The result is what the company calls a human-level understanding, with insights that could have been produced by analysts. It is not enough to know what people are thinking.
The goal is a comprehensive understanding of the human behavior, or at least the behavior that is relevant to decisions about what to buy, how much to pay and which party to vote to. As Palantir is now the mecca of data on criminal and terrorist behavior, Voyager Labs would like to be the Palantir of the public opinion.
The company serves already few companies in public, retail, sports and consulting that care about what people say and do. For instance, retailers can forecast the results of a marketing campaign. They can analyze what kind of products will be better accepted at which point, when and what will cause people to say something about it and what will bring them to buy it. The company also says it can extract insights for purposes such as risk assessment, crisis management, intelligence and fraud protection.
Voyager is not alone in using deep learning for consumer-oriented appliances. Companies such as Ripjar. Trak.io and Revuze uses deep learning, and AI tech to help e-commerce and retailers better understand their customers.