AI Chip Startup Hailo Plans SPAC Merger After Valuation Falls 50% to Under $500M

Quick Facts

• Hailo’s valuation dropped from $1.2 billion peak to under $500 million for planned SPAC merger
• Company laid off 30 employees (10% of workforce) in January and secured $9 million emergency loan
• Israeli startup makes AI chips for edge devices including autonomous vehicles and smart cameras

Edge AI chip startup Hailo Technologies is preparing to go public through a SPAC merger after its valuation collapsed by more than half. The deal values the Israeli company at under $500 million, down from its $1.2 billion peak in 2024.

Calcalist reported the merger plan today, citing regulatory filings from Hailo investor Delek Automotive. The SPAC listing aims to address what sources describe as an urgent need for liquidity at the Jerusalem-based company.

Hailo’s financial distress became visible in January when the company laid off 30 employees, representing 10% of its workforce. Around the same time, it secured a $9 million loan from Delek Automotive at 1.5% monthly interest, rising to 3% if no liquidity event occurs within a year.

Valuation Writedowns Hit Investors

The steep valuation decline forced Delek Automotive to record approximately $77 million in losses on its Hailo investment in 2025. Delek’s stake dropped from roughly $132 million to $55 million by year-end 2025.

The new valuation reflects offers from multiple SPACs, discounted by about 26% to account for expected lock-up periods and merger completion time, according to Delek’s filings.

Founded in 2017 by former Unit 81 alumni, Hailo develops processors for AI tasks at the network edge. The company became a unicorn in 2021 after raising $136 million at a $1 billion valuation. It completed a $120 million Series C extension in April 2024.

Technology Competes With Nvidia

Hailo’s flagship Hailo-10H processor delivers 40 trillion operations per second of 4-bit performance while consuming just 2.5 watts. This efficiency targets edge AI applications in automotive, security, retail and industrial automation sectors.

“We are the only vendor in the market that offers a mature hardware and software stack that can support multiple edge platforms with high-performance AI-based analytics, generative AI and AI-based image and sound enhancement, all for a few Watts of power consumption,” CEO Orr Danon told VentureBeat.

The company claims over 300 customers across industries including defense and medical devices. However, it faces intensifying competition from Nvidia’s Jetson line, which offers comparable performance at higher power consumption.

Stanford professor Christos Kozyrakis believes accelerator chips like Hailo’s will become “absolutely necessary” as AI proliferates. “The energy efficiency gap between CPUs and accelerators is too large to ignore,” he told TechCrunch.

Hailo plans to complete its stock listing on a U.S. exchange in the coming months, joining other AI chip companies pursuing SPAC mergers amid a challenging funding environment.

Read more: Report: Edge AI chip startup Hailo to go public via SPAC merger