by Simona Weinglass, Geektime
Israeli content recommendation platform Taboola is in the final stages of raising $100 million in a Series E funding round, Geektimehas learned. This figure is higher than anticipated, and will lay the groundwork for a likely IPO in the next 12-18 months. According to Geektime’s sources, $75 million of the sum will be invested in the company and another $25 million will be used for a buyback of stocks and options from shareholders and employees.
Taboola recommends editorial and sponsored content across many of the world’s most highly-trafficked sites.Taboola helps publishers monetize their content and drive higher engagement, enable brands to surface their content to the right audience at-scale. And above all, help people discover content they may like yet never knew existed.
Taboola works by teaming up with publishers, for instance, the Atlantic Monthly. A reader clicks on an Atlantic Monthly article entitled “The Death of the Artist—And the Birth of the Creative Entrepreneur,” and at the bottom of the page gets recommendations like “12 Simple Ways to Be More Attractive,” or “10 Millionaires That Went Totally Broke.” These articles are from advertisers. When a reader clicks, Taboola earns money from the advertiser, which it splits with the Atlantic Monthly. If, in turn, the Atlantic wishes to promote its content on other publishers’ sites, it can pay Taboola and its own articles will be recommended elsewhere on the web.
Taboola’s clients include the BBC, Atlantic Monthly, USA Today, Huffington Post, and theBoston Globe. Founded in 2007 by CEO Adam Singolda in Israel, Taboola had raised $40 million in five rounds of funding prior to this recent round. By contrast, its closest competitor, Outbrain, has raised $99 million in six rounds. Both companies are likely to file IPOs in the not-too-distant future at valuations of about $1 billion each. Taboola brought in over $200 million in revenue this year, a figure close to the revenue achieved by Outbrain.
According to Geektime’s analysis, Taboola’s actual profits in 2014 were higher because it runs a significantly leaner ship.
Both Taboola and Outbrain have come under fire for providing “spammy” content. Venture capitalist Marc Andreessen has described such link providers as “part of the ‘race to the bottom’ pervading Internet content.”
Outbrain claims it pre-filters spammy links while Taboola says it gives users a choice with a feature called Taboola Choice that allows users to indicate what types of content they don’t want to see.
Taboola and Outbrain have been widely touted as an alternative to Google Adsense. Both companies have recently signed multi-year contracts with major publishers. That way, on the off-chance they don’t file an IPO, they will be very attractive candidates for purchase by the likes of Google or Yahoo.