Kaltura shares soar 30% after acquiring AI avatar startup eSelf.ai in $27 million deal
Purchase of the Israeli startup adds conversational avatars to Kaltura’s corporate video tools.
Israeli company Kaltura has announced a surprise acquisition that will enable it to integrate avatars into its corporate video systems. Kaltura, whose shares have fallen 20% since the start of the year as it continues to search for a buyer, will pay $27 million for Israeli startup eSelf.ai.
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Since the name of the acquired company includes the coveted “AI” label, Kaltura’s stock jumped over 30% at the opening of trading on Wall Street. eSelf.ai represents another example of the growing trend of small startups that raise only modest Seed funding before being sold, often to provide the acquiring company with experienced artificial intelligence talent. This follows similar recent deals, including the sale of Israeli startup Weavy to Figma and Base44 to Wix earlier this year.
Founded in 2023, eSelf has raised $4 million to date in a Seed round backed by M-Fund, Explorer Investments, and Ridge Ventures. While not a major return on investment, it represents a rapid turnaround. The company’s team includes more than 15 AI specialists in computer vision, natural language processing (NLP), and voice technologies.
eSelf’s core product is a platform that allows organizations to quickly deploy realistic, interactive virtual agents. These agents can converse in more than 30 languages and are customized to each organization’s data and internal terminology. The technology can assist companies with marketing, sales, customer support, employee training, and internal communication. Educational institutions can use such agents for teaching or tutoring, media companies for delivering personalized content recommendations, and financial or medical organizations for tailored advisory and support services.
eSelf was founded by Dr. Alan Bekker and Eylon Shoshan, who previously built Voca.ai, which developed voice-based AI agents and was acquired by Snap, where Bekker later led conversational AI initiatives.
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Following the acquisition, Becker will join Kaltura’s management as CTO. Shoshan is a former member of the IDF’s elite Unit 8200, where he received the Israel Defense Forces Award, and holds a master’s degree from the Technion specializing in natural language processing.
Last year, Kaltura launched a family of AI-based smart agents called Genie, which delivers relevant and personalized multimedia content in real time to employees, students, and TV viewers. eSelf’s technology will add real-time conversational and screen-sharing capabilities to the Genie agents.
Despite these AI initiatives, Kaltura’s business performance and valuation have yet to recover. The company is currently valued at around $300 million, down sharply from the $1.2 billion valuation at its Wall Street IPO in 2021.
Alongside news of the acquisition, Kaltura also reported continued revenue erosion in the third quarter. Revenue totaled $43.9 million, a slight decline compared with the same quarter last year. The bottom line showed improvement, with a net profit of $2 million (excluding one-time items), compared with breakeven results a year earlier. On a GAAP basis, Kaltura posted a loss of $2.6 million, compared with a $3.6 million loss in the same quarter last year.
In addition, Kaltura announced that it had purchased the block of shares held by Goldman Sachs, which invested in the company before its IPO. The 14 million-share block was sold at a 25% discount to Kaltura’s average share price over the past month, for a total of $16.6 million.
