Ahead of its planned Wall Street IPO, Israeli content recommendation company Outbrain has announced that it has raised $200 million from the Baupost Group hedge fund. Baupost, which was founded in 1982 by CEO Seth Klarman, and is a highly respected fund on Wall Street, manages assets worth more than $30 billion. Prior to this financing round, Outbrain had raised $144 million.
Outbrain last week filed a prospectus for a Nasdaq IPO, at an estimated company valuation of $1.8 billion, although the company itself did not stipulate any valuation. Outbrain recommends content that it thinks might interest readers. These recommendations appear at the end of articles on websites, with publishers benefitting from additional traffic being directed to them.
Outbrain was founded in 2006 by co-CEO Yaron Galai. Today Galai heads the company together with co-CEO David Kostman. In the first quarter of 2021 the company reported revenue of $228 million, up from $177 million in the corresponding quarter of 2020. Outbrain also swung from a loss to a $10.7 million net profit in the first quarter of 2021.
Kostman said, "We are excited to announce this investment from The Baupost Group, who share our vision and commitment for our business, our team and our future prospects,"
Galai added, "We proudly lead the recommendation space we created. We have bold plans for the future to continue delivering critical innovation to our premium media partners worldwide and expanding our powerful open web global advertising platform."
Jefferies and Citigroup served as placement agents to Outbrain.
Other shareholders in Outbrain include Lightspeed, Viola, Gemini, Index Ventures, Gruner + Jahr, and Galai who holds a 7.8% stake.
Outbrain had agreed to merge with its Israeli rival Taboola in 2019 but the deal fell through. Taboola began trading on the NYSE last week at a valuation of $2.6 billion, following the completion of its SPAC merger with the ION Acquisition Corp. 1.
Published by Globes, Israel business news - en.globes.co.il - on July 6, 2021
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