"The Financial Times" reports that Outbrain Inc. plans to raise $100 million in an IPO on Wall Street, at a company value of over $1 billion. Goldman Sachs and JPMorgan Chase are the underwriters.
Outbrain declined to comment on potential IPO plans, telling "The Financial Times", “Outbrain continues to evaluate its options to build a strong and sustainable business for the long term."
Outbrain was selected as Israel's most promising start-up by "Globes" in 2011. In 2013, the company planned to raise $100-200 million on Wall Street at a company value of $700-800 million. At the "Globes"-Ernst & Young Journey Conference in October, Outbrain co-founder and CEO Yaron Galai said, "This exit is for the investors. For me, you're not yet really in the business in the first 5-6 years; the money starts coming in only later. I hope that the investors will make an exit, but meanwhile, I'm having fun."
The Financial Times" says, "Outbrain distributes content to 390 million web users each month, and makes money by charging brand owners - including American Express, ExxonMobil and Procter & Gamble - that want to distribute their content to a large audience."
According to IVC, Outbrain had $45 million revenue in 2011, $80 million in 2012, and it reportedly had $130 million revenue in 2013. Revenue was boosted by acquisitions to created added value. It acquired Surphace in 2011, digital content management and storage solutions developer Scribit in 2012, and content optimizing platform developer Visual Revenue Inc. in March 2014.
"Outbrain’s widgets are typically located at the bottom of news articles under the heading “You may also like these”. By serving up enticing headlines - often with eye-catching photographs - in an editorial context, the content is much more likely to be clicked on by readers than traditional banner advertising," says "The Financial Times". "This subtle form of advertising, known as content marketing, is growing rapidly as digital marketers attempt to reach consumers who ignore classic ad formats. However, content marketing has attracted criticism from some publishers, who say there is a danger it will put off readers by blurring the line between editorial content and advertising."
"The Financial Times" adds that Outbrain’s biggest competitor is another Israeli start-up Taboola Ltd., which "specializes in video content and often shows pictures of scantily-clad women to attract clicks."
Published by Globes [online], Israel business news - www.globes-online.com - on April 3, 2014
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