US-based online content discovery platforms Outbrain and Taboola, which count a host of corporate investors between them, have abandoned plans to merge, CNBC reported yesterday.
Taboola announced plans to acquire Outbrain for $850m in a deal consisting of $250m in cash and a 30% stake in the combined company in October 2019, seemingly reaching an agreement after multiple previous attempts to form a single business had failed.
The combined entity would have operated under the Taboola name and would have been valued at $2bn. The deal fell apart after regulatory scrutiny in the UK and Israel delayed completion, while Taboola grew its business in the meantime.
The growth led Taboola to seek a change in the terms of the transaction, pushing for a deal where it would only pay half of the originally agreed $850m figure.
Founded in 2006, Outbrain operates a digital advertising platform that enables websites to automatically display relevant content below their articles to earn commission on sponsored articles from third-party publishers. Taboola, founded the following year, runs a similar offering.
Outbrain had raised $195m in equity funding as of 2016, when it secured $45m from unnamed investors, quantitative trading firm Susquehanna International Group’s Susquehanna Growth Equity unit having injected $50m the year before.
The company’s earlier backers include Index Ventures, Carmel Ventures, Lightspeed Venture Partners, Gemini Israel Funds, Glenrock Israel, Rhodium and Zohar Gilon.
Taboola’s total funding stood at $160m as of a $3m commitment from DailyMail.com, a subsidiary of media group Daily Mail and General Trust, in June 2015. It had raised a multi-million dollar sum in a series E extension from internet group Baidu the previous month.
Investment and financial services group Fidelity had led the $117m first tranche of the series E round in February 2015, investing alongside media group Advance Publications, internet company Yahoo Japan and Comcast Ventures, a subsidiary of mass media group Comcast.
The first close of the round also featured investment holding firm Groupe Arnault, Marker, Steadfast Capital and Carlo De Benedetti, chairman of conglomerate Gruppo Editoriale L’Espresso. Pitango Venture Capital, WGI Group, Evergreen Venture Partners and Eyal Gura are also among Taboola’s shareholders.
