Catching up with Jelli – which is being acquired

Startups generally take one of three paths: They go out of business, go public, or get acquired. In the case of Jelli Inc., it was the latter. The San Mateo, California-based company, with an office in Boise, is being acquired by iHeartMedia in a deal intended to close before the end of the year.

But the acquisition won’t make a lot of difference to Jelli, which will keep its CEO, its name, its employees, and its BoDo location, according to CEO Mike Dougherty.

“Jelli’s name won’t change – it’ll be a standalone company within iHeartMedia,” he said. “The downtown office with the Jelli sign – that won’t change. The team has been retained, and their titles won’t change.”

Based in San Antonio, Texas, iHeartMedia is an audio media company that includes broadcast radio stations and streaming media. Other activities range from live events to outdoor advertising. It filed for Chapter 11 bankruptcy earlier this year but is expected to emerge from it soon.

Jelli offers a technology platform for buying and running audio advertising, used by more than 2,300 radio stations representing more than 60 percent of listener share of all radio listening in the U.S., according to the company. That includes iHeartMedia.

“They were one of our largest customers for three or four years,” Dougherty said. “It became clear that we could move faster, given that audio is sort of exploding right now, if we joined forces.”

He will report to Brian Kaminsky, president of the SmartAudio and Analytics Group for iHeartMedia.

When Jelli set up shop in Boise in 2017, it said it intended to have more than half of its then-50 employees in Idaho. The software engineering branch of the company had been expected to move to Boise during 2018.

Because of that, Jelli had received a tax reimbursement incentive, or TRI, of 20 percent for the next eight years from the Idaho Department of Commerce. A TRI is a tax credit the state gives to Idaho companies trying to expand or to out-of-state businesses looking to move into Idaho. It can be worth up to 30 percent of a company’s income, payroll and sales taxes for as long as 15 years. Jelli had been expected to create a total of 92 local jobs with an average wage of more than $50,000 a year, Gov. C. L. “Butch” Otter said at the time.

Jelli currently has about 15 employees in Boise, though that’s expected to change, Dougherty said. “We’ll be growing that number in the coming months and years with iHeart,” he said. “They view Boise as a key opportunity for growth. The exciting thing about Boise and Idaho is it can become a technology center of excellence for us to hire outside of Silicon Valley. The number of computer science graduates Boise State University is graduating, and the ecosystem of other companies that hire software engineers, gives us the ability to recruit local talent to help us scale.”

Boise staffers were all hired locally, he added.

“At this time, we have not had conversations with either company about the new ownership arrangement,” said Taylor Walker, public information specialist for the Idaho Department of Commerce. “However, TRI contracts are able to be reassigned. If the contract is reassigned and the company’s new owners are willing to take the contract over, agree to the original terms and conditions, and meet the required jobs and wages thresholds, the new owners would be eligible to earn a reimbursement if they continue to stay and grow in Idaho.”

Boise’s proximity to the company’s headquarters in San Mateo – a 75-minute plane ride – has also been an advantage, Dougherty said. “People collaborating love being in Boise to visit,” he said. “They’re always asking, ‘When do I get to go to Boise?’ There’s a nice tech scene. It’s super cool. For us, it’s a great fit.”

So if nothing is changing, what’s the advantage of being acquired? Primarily, Jelli will move from being owned by its venture capital investors – a total of $46 million over three rounds of funding, including its seed round – to being fully owned by IHeartMedia, Dougherty said.

“Plus, we will be able to tap into the resources of a bigger audio company, and move into new areas around streaming and voice,” he said.

The amount of the sale wasn’t disclosed, but it will pay off the investors, Dougherty said. “All the investors made money.”