Outbrain has taken a significant step towards an IPO and submitted a confidential prospectus to the US Securities and Exchange Commission

The content recommendation company Outbrain has taken a significant step towards an initial public offering (IPO): The company has submitted a confidential prospectus to the US Securities and Exchange Commission. This means that within three months the company will publish its public prospectus, which will allow exposure to the company's performance, business information, shareholders and more.
Most companies do not advertise on the submission of a public prospectus, and apparently behind the announcement is an attempt to signal to the market and employees that the company is in a positive direction. About four months ago it was reported in TheMarker that the company had hired investment banks City and Jeffries to accompany it through the process, and that it was aiming to achieve a value of $ 2 billion.
Outbrain was founded in 2006 by Yaron Galai and Uri Lahav, and is currently managed by Galai and David Costman, who serve as co-CEOs. Over the years, Outbrain has raised about $ 150 million. Gemini, Glenrock, Index, Harborwest and Rhodium The intention to go public and create liquidity for shareholders is a result of the cancellation of the merger with Israeli Tabula, Outbrain's prominent competitor.
Outbrain and Tabula compete with each other in a category called Native Advertising - that is, advertising that incorporates content naturally, as part of the user experience. Both companies have developed an algorithm that analyzes the preferences of different readers, and offers them articles - text or video - that may interest them. In this way, they create traffic (traffic), and extend the time spent by surfers on the content sites.
The business model of the two companies is based on sharing profits with the publishers. Outbrain and Tabula receive money from advertisers, and share it with content sites. Outbrain is estimated to have grossed about $ 1 billion in the past year, but a significant portion of that revenue goes to content sites, which are the company's partners.
Tabula announced in January that it had chosen another alternative to move to Wall Street - a merger with Spock, a non-operating company that raises money to invest in a private company and merge with it. The merger will be worth $ 2.6 billion. Documents released by Tabula to investors revealed that its revenue in 2020 was about $ 1.2 billion. Excluding the cost of acquiring traffic on websites (Traffic Acquisition Costs), which includes, for example, the payment to content sites, its revenues amounted to $ 375 million - an increase of 28% compared to 2019.
The merger between the two companies exploded in September. As part of the merger, Tabula was to "swallow" Outbrain, receive 70% of the merged company, and pay $ 250 million to Outbrain's existing shareholders. After ten months in which the companies worked to obtain regulatory approvals for the deal, Tabula sought to reopen the agreement and change the terms of payment - and the deal was blown up.
Outbrain joins SimilarWeb and Caltura, which have opted for an IPO in the traditional way (meanwhile, Cultura has frozen its intention to issue), while most Israeli companies opt for a merger with Spock, including Iron Source, Pioneer and Ituro.