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Taboola and Outbrain are finally coming together in a cash-equity deal under the Taboola brand. The deal, announced today, will give Outbrain’s shareholders $250 million along with 30% ownership in Taboola.
Advertising company Taboola and its competitor, web advertising platform Outbrain announced they are merging, forming one company. Even though this is a mutual company, it will nevertheless be called Taboola, and Taboola’s founder Adam Singolda will act as its CEO.
Taboola is said to pay Outbrain investors $250 million in cash plus a 30% share of the combined companies.
The main goal is to widen its customer list that should now have more than 20.000 online properties as well as more than 2.6 billion in the audience. The other goal is competing with tech giants as are Google and Facebook. The newly merged company is predicted to be worth $2 billion with the valuated transaction of $850 million.
CEO Singolda claims both companies are pretty much profitable having around $1 billion in revenues each. This is the last acquisition by Taboola that was founded back in 2007 in Israel with the main goal to act as a recommendation engine for video content.
After moving its headquarters to New York City, Taboola raised $1.5 million in funding in November 2007. This was followed by $4.5 million in November 2008, and $9 million in August 2011. Taboola then managed to raise $15 million in February 2013 and by 2017, the company managed to provide 1.5 billion article recommendations per day, due to adoption by major news websites.
In 2014, Taboola acquired a California-based programmatic advertising company called Perfect Market. A year later it raised $117 million in a Series E funding round and announced extra funding from Baidu for an undisclosed amount. In July 2016, Taboola acquired ConvertMedia, a recommendation engine for video content and in January 2017, it bought a website personalization firm called Commerce Sciences.
The deal with Outbrain took some years to be realized – Singolda claims that it took them more than a decade because they needed to “iron out the details and get longtime rivals to trust each other.” He added:
“It took time to build trust and to get to know each other. We needed more time to get to where we are now. The reason it finally happened was the existence of a collective threat. Definitely the pressure of Google and Facebook, and the opportunity to give them a proper fight by increasing our reach was important to us.”
Merged companies are now connected with some of the biggest media properties including the CNBC, NBC News, USA TODAY, BILD, Sankei, Huffington Post, Microsoft, Business Insider, The Independent, El Mundo, Le Figaro, CNN, BBC, The Washington Post, The Guardian, Spiegel Online, El País and Sky News. The company will now be able to get off Google, Amazon and Facebook, the three companies that together account for around 70% of all online advertising revenues.
Even though both Taboola and Outbrain are pretty much similar, there are some key points of differentiation that will help the newly merged company to expand in other areas as well.
Singolda noted that he is aware there is a lot of work ahead of merging the products and that they have big competition ahead of them.
“But we have no choice. These are big companies and we have to give them a fight.”
He also added that after the task of integration is initiated, they could even consider an IPO, or raising more money as a private company.