Babylon said on Sunday it told the US Securities and Exchange Commission it was withdrawing a draft prospectus it had submitted in November 2012. It had filed for an initial public offering for up to $115 million.
"This follows company announcements that it is currently investing efforts in holding negotiations for a merger with ironSource,"
Babylon said in a statement to the Tel Aviv Stock Exchange, where it is already listed.
IronSource is an online and mobile software distributor.
In April Babylon signed a four-year cooperation agreement with Yahoo Inc in the Internet sector, including on mobile devices. In 2012 Google was the main source of revenue for Babylon.