Billion Dollar Unicorns: Outbrain Prepares for an IPO

According to a report from the Content Marketing Institute and MarketingProfs, 93% of B2B marketers use content marketing and 42% found content marketing an effective marketing tool. Here is how Manhattan-based Billion Dollar Unicorn club member Outbrain has become a leading content discovery platform in the market.

Outbrain’s Offerings

Founded in 2006 in Israel by entrepreneurs Yaron Galai and Ori Lahav, Outbrain claims to be the world’s largest content discovery platforms available today. Before starting Outbrain, Yaron Galai had founded Quigo and sold it to AOL in 2007. The two founded Outbrain with the mission of helping “people discover content that they can trust to be interesting, relevant, and timely for them.”

Using their platform, brands and marketers are able to increase user engagement and market reach. Outbrain offers two key services. The first one, called Amplify, is for brands that let content be distributed on their partner websites where target consumers are already scouting for new content. Outbrain’s partner publishing sites include names like CNN, Fox News, Mashable, and Slate. Advertisers can choose to promote different forms of content including articles, videos, infographics, and slideshows as promoted stories on these publisher sites.

The second service offered by Outbrain is focused on media companies and allows them to increase user engagement. Outbrain’s service offers recommendations and helps the audience discover content on the publisher’s website thus leading to additional traffic and revenue.

Content is offered through widgets and links listed under banners such as Recommended Stories, or Suggested For You. Outbrain’s user statistics reveal that they reach over 561 million people globally each month. They serve over 190 billion recommendations monthly. The numbers have increased significantly from 390 million viewers and 150 billion monthly recommendations that they had recorded early last year.

Their client list includes names like Starcom, Digitas, Mindshare, American Express, P&G, Colgate-Palmolive, General Mills, and Exxon.

Outbrain’s Financials

Outbrain earns revenues by including ads among these recommended stories. They also charge their customers a fee for the revenue generated through these links. They do not disclose their financials, but revenues had grown from $45 million in 2011 to $80 million in 2012. Analysts believe that they were expecting revenues of $130 million in 2014. As of 2013, they weren’t profitable.

Outbrain has been venture funded so far with $99 million raised from investors including Rhodium, GlenRock Israel, Lightspeed Venture Partners, Carmel Ventures, HarbourVest Partners, Gemini Israel Ventures, Zohar Gilon, LGiLab, and Leon Recanati. Their last round of funding was held in October 2014 when they raised $35 million at a valuation of $350 million.

Valuation has been increasing since then. At the end of 2014, they filed confidentially with the SEC seeking approval to list in the US. They are expecting to raise $200 million-$300 million from the listing at a valuation of over $1 billion.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

Looking For More Hands-On Advice?

I receive many emails from entrepreneurs who want to discuss their specific businesses. I’m very happy to discuss your situation during my free online 1M/1M Roundtables, held almost every Thursday. During each roundtable, up to five entrepreneurs can pitch their businesses and receive my immediate and straightforward feedback.

To give entrepreneurs all over the world access to Silicon Valley’s knowledge, methodology, and network, I founded the One Million by One Million (1M/1M) global virtual incubator. 1M/1M aims to nurture a million entrepreneurs to reach a million dollars each in annual revenue and beyond, thereby creating a trillion dollars in global GDP and ten million jobs.

For those still testing the waters of entrepreneurship, I’ve written my Entrepreneur Journeys book series to inform and inspire. My newest book, Billion Dollar Unicorns, is now available from Amazon.

If you are interested in entrepreneurship topics and my writings, you can follow me here. I hope to publish three articles on LinkedIn every week.

Photo: andy nunn/Flickr.com.