AI Chip Startup Hailo Valuation Halved to Under $500 Million Amid Urgent IPO Pursuit

AI chipmaker Hailo seeks urgent liquidity through a SPAC merger as valuation falls below $500M and debt costs rise for the former Israeli unicorn.

By: AXL Media

Published: Apr 4, 2026, 8:11 AM EDT

Source: Information for this report was sourced from CTech by Calcalist

Strategic Shift Toward Public Markets Under Duress

Israeli artificial intelligence processor manufacturer Hailo is preparing for a Wall Street debut via a Special Purpose Acquisition Company (SPAC) merger, reflecting a dramatic downturn in its market valuation. Long considered a flagship of the local AI sector, the company is now seeking critical funding to sustain ongoing operations. Financial statements published by Delek Automotive, which holds a 12.1% stake in the firm, indicate that the transition to public markets is being driven by immediate capital requirements rather than opportunistic growth.

Significant Value Erosion for Existing Stakeholders

The proposed merger valuation represents a decline of more than 50% from the company’s peak valuation of $1.2 billion. Delek Automotive reported a substantial loss of approximately NIS 242 million on its investment throughout 2025, with its remaining holding in Hailo now valued at roughly $55 million. This revised figure is based on offers from multiple SPAC entities and includes a 26% discount to account for anticipated lock-up periods and the time required to finalize the transaction.

Emergency Funding Measures and Interest Penalties

To maintain operations ahead of the liquidity event, Hailo has relied on high-interest emergency loans. In January 2026, Delek Automotive provided a $9 million credit facility to the startup at an initial interest rate of 1.5% per month. Should the company fail to complete its IPO or another liquidity event within one year, these interest costs are set to double to 3% per month. This financial arrangement underscores the severity of the cash-flow challenges facing the formerly high-flying "unicorn."