At $1.25B Valuation For News Link Recommendations, Outbrain Raises $160M

The New York-based firm, Outbrain, which delivers recommended online links at the bottom of news items, raised $160 million in its first public offering today, valued at $1.25 billion.

It sold 8 million shares of common stock on Nasdaq for $20 each, and the price surged to $20.99 on the first day of trading before falling down to $20.15 at the end of the day. The stock is traded under the stock symbol “OB.”

Outbrain, started in 2006 and launched with its first publisher in 2008, is a widget that appears at the bottom of media stories, such as those on CNN, and suggests further links to click on. 

Some have referred to this as clickbait, but the business claims that it is quite successful, with many users willingly clicking on Outbrain’s recommendations for additional stories.

Advertisers can add their ads, and Outbrain will split a portion of the revenue with them.

The co-CEO of Outbrain, Yaron Galai, said in an interview – 

So much that has changed and evolved, as we started before mobile even existed in a real way. The thing I’m proud of most is the vision for this market has remained remarkably consistent

He added – 

And that was to solve two things. First, the user experience for people to help them discover what’s next. And the second is to create a sustainable source of revenue for media owners, for publishers and newspapers

 Galai also said that the arrival of mobile was a game-changer for Outbrain. The user experience of a newsfeed on a mobile phone has evolved into a natural sort of experience, with users on social networks and other sites just acclimated to thumbing through a tailored feed of recommendations. 

Over the years, Outbrain has completed five acquisitions. With 900 workers globally, the firm employs 300 individuals in two research and development facilities in Israel and Slovenia.

Galai also commented –

The results we see in the growth of the company generating a run rate of about a billion dollars in revenue is all based on engagement. Advertisers only pay us for actual engaged consumers. And so the growth is proof of that