US-based content discovery platform Taboola acquired Outbrain, a US-based peer backed by quantitative trading firm Susquehanna International Group (SIG), yesterday in an $850m cash and stock deal.
The transaction consists of $250m in cash and a 30% share of the combined company, which will have a $2bn valuation according to Forbes. It will retain the Taboola name and be led by Taboola’s founder and chief executive Adam Singolda.
The agreement follows several previous discussions to merge, which seemingly all failed because the companies were unable to agree on which firm would lead the new entity. It was finally struck thanks to recent Taboola revenue growth, which increased 65% over 2017 and 2018.
Outbrain was founded in 2006 and Taboola the year after. They have developed similar technologies that allow websites to automatically insert related content below articles to keep users on their website or earn commission on sponsored content from third-party online publishers.
Outbrain’s total equity financing stood at $195m as of its latest round in 2016, when it received $45m from undisclosed investors following a $50m cash injection from SIG fund Susquehanna Growth Equity the previous year.
The company’s earlier funding came from Index Ventures, Carmel Ventures, Lightspeed Venture Partners, Gemini Israel Funds, GlenRock Israel, Rhodium and private investor Zohar Gilon.
Taboola had raised at least $160m in funding, most recently taking $3m from DailyMail.com, a division of media group Daily Mail and General Trust, in June 2015, weeks after it received a multi-million dollar amount of series E funding from internet group Baidu.
Baidu’s cash came after Taboola secured $117m in a first series E tranche led by investment and financial services provider Fidelity and backed by media company Advance Publications, internet company Yahoo Japan and Comcast Ventures, a subsidiary of mass media group Comcast, in February 2015.
Investment holding group Groupe Arnault, Marker, Steadfast Capital and Carlo De Benedetti, chairman of conglomerate Gruppo Editoriale L’Espresso, also contributed to the first close. Taboola’s shareholders also include Pitango Venture Capital, WGI Group, Evergreen Venture Partners and Eyal Gura.
