Outbrain seeks Wall Street IPO at $1b. valuation

The company has been signaling for some time that this is the preferred choice of its management, rather than a sale of the company.

December 3, 2014 21:51
1 minute read.
New York Stock Exchange

The floor of the New York Stock Exchange. (photo credit: REUTERS)

Outbrain Inc. is planning an IPO in the 2015. The company, which has developed a content-recommendations engine, plans to raise $100 million to $200m. on Wall Street at a company value of $700m.-$800m.

Outbrain earned $45m. revenue in 2011 and $80m. in 2012. Its revenue is forecast to reach $130m. in 2013.

The growth is partly due to acquisitions.

Outbrain acquired Surphase in 2011. In 2012, it acquired Scribit, which provides a digital-content management and storage solution.

In March 2013, it acquired Visual Revenue Inc., which helps content editors optimize content and its location on their sites.

Outbrain, founded in 2006 by CEO Yaron Galai and CTO Ori Lahav, has raised $65m. to date from Carmel Ventures, Gemini Israel Ventures, GlenRock Israel, Lightspeed Ventures, Index Ventures, Rhodium Ltd., Sigma Investment House Ltd. and angel investor Zohar Gilon. Galai previously founded Quigo, which had a successful exit.

Outbrain has built a content-recommendations engine based on advanced algorithmic, which appears at the bottom of news items and features on various content sites in Israel and other countries. The engine shows a number of recommendations on various articles within the site and elsewhere. The engine recommends articles on the basis of an analysis of the reader’s taste. It can keep the reader longer on the site or direct him to another site. If another site is recommended, the site owner shares the revenue from the recommendation with Outbrain.

Outbrain works with leading news sites, including Reuters and the New York Post. In Israel, it works with leading content sites. It also works with commercial brands that are seeking to market their content to boost traffic to their sites. These customers include General Electric in the US.

The idea of an IPO by Outbrain is not new. The company has been signaling for some time that this is the preferred choice of its management, rather than a sale of the company.

Galai has previously sold three companies, and he believes that Outbrain should be different and built up as a large company. In 2007, he sold Quigo to AOL Inc. for $360m.

Joseph Morgenstern is a financial consultant and the publisher of the Israel High-Tech & Investment Report.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection