Taboola — the recommendation platform that provides 200 billion content suggestions to 550 million users each month, and analytics to publishers and brands about what’s getting people clicking (and what is not) — is today announcing a huge funding round of $117 million on a valuation just shy of $1 billion.
Taboola will use the money to turbo charge its business, CEO Adam Singolda tells me, with the three goals being platform enhancements such as personalised recommendations based on device and place; more international markets, and more acquisitions. “This round will help us go to the next level as a company,” he says simply.
It comes as the Taboola — which competes with Outbrain but also potentially Google and Yahoo — remains mum on when or if it may ever go public, and potential acquisition approaches. “An IPO is not something that we rule out,” among “different options” he says. “We thought for now this was the right option.”
If — after big funding rounds for sites like Buzzfeed, Vox and Mashable, and big exits for content plays like Maker Studios — you had any doubt that content was in the ascendant in both the tech and venture worlds, Taboola’s story should help put that idea to rest.
Taboola is not giving out a post-money valuation but we understand from reliable sources that it is just shy of $1 billion (and that reports of a higher valuation are not accurate). The seven year-old company is currently bringing in $200 million in revenues annually and has been profitable for the last six quarters.
On its own, the oversubscribed Series E is nearly three times as much as the company had raised to date ($40 million). But what’s just as notable is the list of strategic investors that are backing it. Alongside lead investor Fidelity Management and Research Co, also participating are Advance Publications (Condé Nast’s parent), Comcast Ventures, Mr. Carlo De Benedetti (Chairman of the Italian publishers Gruppo Editoriale L’Espresso), Groupe Arnault (of LVMH fame), Yahoo! JAPAN (but not Inc.), and another unnamed investor.
This speaks to how Taboola is already being used across major web properties, but also to how publishers and brands are pinning hope on services that are driving more traffic to their content and their web properties.
That’s an increasingly important and challenging task, given the rise of social media platforms like Twitter and Facebook, which could just as easily serve as replacements for the sites themselves (how many times have you read a headline in your timeline and chose not to click?) as they can drive traffic to them.
You’ve been Taboola’d
If you’ve ever been unable to resist a click on one of those thumbnails at the bottom of an article on the web that leads to articles about botched plastic surgeries, or top 10 pension mistakes, then chances are you’ve been Taboola’d. ComScore last year said that the company was actually seeing more reach on desktop in the U.S. than Facebook, Yahoo, and AOL covering 86% of users, with USA TODAY, NBC and FOX Sports among the hundreds of sites that use its widgets.
Started when Singolda was fresh out of the army in Israel — where more than half of the staff continues to work on engineering, with a U.S. HQ in New York — Taboola was created when Singolda he and his friends decided it was impossible to find anything good to watch on TV despite dozens of channels.
“We decided that what was needed was a way for videos to find people, a search engine in reverse,” he says.
Later that idea was expanded to other kinds of content, and a wider range of services, such as the platform that lets editors push stories for recommendation and monitor how well they do; the ability to A/B test different headlines on their home pages to see how they work; and the ability to recommend not just content but also products and services (by way of a recent acquisition of Perfect Market).
The recommendation widget and related analytics are actually free for publishers to use. Where Taboola makes money is in each click that it drives to a subsequent site, and it has developed a kind of AdWords-style marketplace with a CPC rate attached to those clicks.
While a lot of the work that Taboola has done to date has focused around how users interact with desktop websites, today the goalposts are shifting.
“Seven years ago most of the web was driven by search and large screen sizes,” he says. “Now traffic can come from Facebook, apps, tablets, phones. You have people who read your stories on your site, but also in syndication, or watch a related video component,” he says. “We are investing to map that context better and to bubble up relevant results, as well as actionable data so that publishers can better respond.”
That will also include adding in more “native” advertising — also known as sponsored content — and other types of suggested links.
The move to make the content suggestions better comes also at a time when potential forays into more advertising recommendations may be challenged: there have been reports that Taboola and others like Google and Amazon are paying fees to popular service Adblock to get around its advertising blocking technology. No comment on this for now from Singolda.
As for the name, Singolda gets asked about it a lot and says it is a spin on “tabula rasa.”
“It has interesting meaning that relates to our business where you’re trying to solve a mathematical equation and you don’t know the variables in advance, so you have to try until you get there,” he tells me. “It’s also sometimes used compared to raising a baby that’s constantly growing and changing.”