Israeli AI chip manufacturer Hailo is in the process of merging with a Special Purpose Acquisition Company (SPAC) to secure vital capital for its ongoing operations. This move comes as the company faces mounting market pressures and a dramatic shift in the technology landscape. Financial statements from Delek Automotive, a significant stakeholder in Hailo, reveal that the deal is being conducted at a substantially lower valuation than its previous fundraising rounds.
This valuation decrease has forced Delek Automotive to record a significant loss of approximately NIS 242 million (around $77 million) on its investment in 2025. Hailo's valuation has reportedly fallen by more than half from its peak of $1.2 billion, now standing at less than $500 million. This figure is based on offers from multiple SPACs, further discounted to account for expected lock-up periods and the time required to finalize the merger.
The urgency for capital is underscored by a recent loan of $9 million provided by Delek Automotive in January 2026, with a high monthly interest rate that could increase if a liquidity event is not completed within a year. This financial situation starkly contrasts with Hailo's earlier status as a "unicorn" startup, valued at over $1 billion.
Founded in 2017 by Orr Danon, Avi Baum, and alumni from Israel's Unit 81, Hailo develops specialized processors designed to bring Generative AI capabilities to edge devices. Despite earlier successes, including raising $120 million to bring GenAI to edge devices and appointing Rakefet Russak Aminoach as Chairwoman of the Board, the company has also undergone workforce reductions, with nearly 10% of staff laid off as it refocuses on robotics and Physical AI. The current situation highlights the challenging environment for AI hardware startups navigating market demands and the path to public markets.
---
⚠️ This article used AI assistance. Please verify facts independently.