The market may be waiting for online content discovery platform and Billion Dollar Unicorn Club member Taboola to go public. But Taboola’s management has no plans to go public soon. Analysts project the content recommendation market to grow from $700 million in 2014 to $3.4 billion by the year 2018. Here is how Taboola is planning to capitalize on that growth.
To drive its growth, Taboola has been entering into tieups with strategic partners. Last week, they expanded their existing agreement with Business Insider to provide exclusive personalized recommendations to more than 45 million monthly unique visitors to the Business Insider’s website. The agreement will involve Taboola offering on-site and mobile video content recommendations.
Taboola is also growing their geographic presence. Last month, they entered into a strategic investment with Chinese search giant Baidu. The agreement will involve both desktop and mobile recommendation services. The agreement also involved investment by Baidu in Taboola. Terms of the deal were not disclosed, but analysts estimate that Baidu’s investment ranged from $20 million-$30 million. The move will help Taboola expand their presence in Asia. Last year, Taboola had entered into the Japanese market with an agreement with Yahoo Japan.
Taboola’s Rising Competition
While the global content recommendation market is dominated by Taboola and Outbrain, others are joining the race. According to Datanyze’s report, Outbrain leads the market with a 27% share followed by Taboola at 23% market share. But that could soon change as bigger giants like Google gear up to enter the market.
Earlier this quarter, Google announced their entry into the content recommendation market with the launch of a new tool for AdSense. Known as Matched Content, the tool gives publishers access to Taboola-like recommendation widgets. Additionally, publishers can also analyze customer engagement related metrics through Matched Content. As of now though, Matched Content recommends only internal links within the publisher’s site, but it wouldn’t take long for Google to expand that feature.
Taboola has seen rapid growth in revenues so far. Their unique technology uses a mathematical predictive engine EngageRank and Aggregated CPR allowing them to merge more than 1000 signals and select 3 or 4 URLs for recommendation and deliver high click-through rates. By 2013, Taboola was operating at revenue run rates of more than $100 million. Recent reports suggest that Taboola may now have doubled that to $200 million.
They continue to remain venture funded and have mentioned that they are not interested in going public soon. They have raised $157 million in funding so far with investments from Pitango Venture Capital, Marker, WGI Group, Evergreen Venture Partners, and Eyal Gura. Their last round of funding was held in February 2015 when they raised $117 million in a round led by Fidelity Management and Research Company at a valuation of nearly a billion. Taboola plans to use the latest funds to acquire companies that could help improve their technology platform.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorn