Posted on Tuesday, Feb 3rd 2015
One of the more amazing stories of the Billion Dollar Unicorn Club members is that of Taboola. Taboola is an online content discovery platform that has shown how to grow from zero-revenue for the first four years to a revenue run-rate of over $100 million in the sixth.
New York-based content discovery platform Taboola was founded in 2007 by Adam Singolda, who worked in the Israeli army protecting information using encryption, large data sets, and applied mathematics. After his army tenure, Adam was searching for things to do and realized that there was a need for a “search engine in reverse”. He figured that there was a need for a platform that would give users information even before they searched for it. Thus, Taboola was born. Soon after, Adam raised funds from an Angel Investor and he along with three of his army friends started developing the product.
Taboola began as a video content discovery, only because it appeared to be the most difficult technology to solve for. They launched a video recommendation widget that delivered video content to users based on their viewing history.
For the first four years of operations, Taboola was developing their predictive analysis technology and thus not earning any revenues. They then developed unique technology in the form of their mathematical predictive engine EngageRank and Aggregated CPR that allowed them to merge more than 1000 signals and select three or four things for recommendation. The combination of these two metrics helped them deliver high click-through rates. They then launched a content marketplace and marketed their tool to publishers who were now willing to pay per user that came to their site, helping Taboola generate real revenues.
They had also expanded to other categories as well and their widget Content You May Like now recommended articles, videos, and galleries across multiple online publications. Their recommendations are viewed by more than 400 million unique visitors every month. Their marketplace has more than 1 million pieces of recommended content and are seeing over 150 billion impressions monthly.
By 2013, Taboola was operating at revenue run rates of more than $100 million. Analysts believe that they ended 2014 with revenues of $200 million. Their customers include the likes of USA Today, NYTimes, TMZ, Politico.com, BusinessInsider, CafeMom, Billboard.com, Fox Television, Weather.com, Examiner, and many more.
Taboola has been venture funded so far. They have raised $140 million with investments from Pitango Venture Capital, Marker, WGI Group, Evergreen Venture Partners, and Eyal Gura. Their last round of funding was held in December 2014 when they raised $100 million from undisclosed investors. Analysts believe that Taboola is now preparing to go public and their IPO is expected this year. Last year, Taboola was valued at over $1 billion.
Content marketing is a fast growing area. The market was estimated to be worth $44 billion in 2013 after recording a 9% growth over the year. According to a report by the Content Marketing Institute, nearly 93% of the B2B marketers they surveyed were using content marketing as a marketing tool. The improvement in vendor algorithms can be seen from the improvement registered by these marketers. The survey found that 42% of the marketers found content marketing to be an effective solution, compared with 36% a year ago. More impressively, 58% of these marketers plan to increase their budgets for content marketing this year. Surely, Taboola is in a hot market segment to drive fast growth.
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 Unicorns
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