Content recommendation platform company Taboola Inc. announced today that it has completed a huge $117 million financing round, led by Fidelity Management and Research Company. Existing investors Marker LLC and Steadfast Capital also participated in the round, as well as new strategic investors, including Advance Publications (parent of Condé Nast and Advance Digital), Comcast Ventures, Carlo De Benedetti (chairman of Gruppo Editoriale L'Espresso), Groupe Arnault (the controlling shareholder of LVMH), Yahoo! JAPAN, and others. The new Series E funding brings Taboola’s total capital raised to $157 million.
The current financing round began some time ago, and sources had assumed it would close in the vicinity for $80-100 million. Ultimately, however, the company succeeded in raising more than initial estimates. Taboola founder and CEO Adam Singolda said that the initial fundraising target was, in fact, $100 million. “During the past six months, in which we raised the current investment, demand grew to more than we wanted. We could have raised much more than $117 million, but we didn’t want to, and didn’t need to. The company has targets, and in the end it was decided that this would be the size of the investment round,” explained Singolda.
As for the goal of the fundraising and the manner in which the money raised will be invested in Taboola’s development, Singolda explained that he has three goals: “First, we want to invest in technology and development in our Israel offices. We also want to invest in global markets, with an emphasis on France, Italy, and Japan. In addition, we want to work on the next generation of personalization, so we can give content providers and advertisers additional tools for content recommendation, and increase user engagement.”
Singolda declined to comment on the company value at which the funds were raised, however, various sources estimated that it was between $1 billion and $1.5 billion. Singolda did say that company’s 2014 revenue exceeded $200 million, and that the company has been profitable for the past 18 months.
Taboola has been mentioned a few times as a company that is expected to hold an IPO in the near future, but Singolda wants to convey a different message - one in which it is not in the company’s immediate plans. “We are not preparing for an IPO now, but I am not ruling it out,” he says. Singolda then goes on to say, “I don’t imagine we will hold another private investment round. It seems that the current round is likely pre-IPO. There are many companies that raise a lot of money before an IPO.” Singolda says that the company is ready for an IPO in terms of accounting, and the company brought on David Aber as CFO already a year ago. Moreover, in the company’s press release for the current investment round, it mentioned that Credit Suisse “acted as the exclusive private placement agent to Taboola,” indicating that it is likely that it will also serve as underwriter for the future IPO.
Taboola’s main product is content recommendations that typically appear at the bottom of articles on leading content websites worldwide. The recommendations work in such a way that a content website may choose whether to promote internal or external content. External websites pay Taboola for the traffic they receive, and a portion of that money goes to the content provider on which the recommendation appeared. Taboola says it serves more than 200 billion recommendations to over 550 million unique visitors every month on leading websites such as USA TODAY, NBC News, Business Insider, Chicago Tribune, FOX Sports, and The Weather Channel. Taboola competes directly with Outbrain, another Israeli company that it also considering an IPO. Other companies, including Yahoo! and AOL, compete in this market as well.
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2015
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