Hair Tips into Big IPO Plans 2020

 Hair Tips into Big IPO Plans 2020

Hair Tips into Big IPO Plans 2018

If you've come across stories like "13 Things Your Hairstylists Won't Tell You" and, the "Top 10 Most Terrifying Shark Attacks!" when surfing the Internet, then you're already familiar with what may be the next big initial public offering out of Israel.
Critics may love to accuse Outbrain Inc. and Taboola of degrading publishers' websites with tacky content, but the Israeli companies have investors' attention because readers are clicking away. They served up articles, videos and lists (or 'listicles' in the industry's vernacular) that were viewed by more than one billion people worldwide in December, according to comScore Inc.
Now Outbrain is planning an IPO in the U.S. at a valuation of about $1 billion, and Taboola is in the final stages of a pre-IPO funding round, according to people familiar with the companies' plans. While Outbrain hasn't indicated its deal is imminent, the offering is one of the most anticipated -- if not the most anticipated -- IPO out of Israel this year.
The two rival startups, whose algorithms spit out a mix of free and sponsored stories that appear at the bottom of online articles, have grown by winning over publishers seeking to boost readership and ad revenue as Facebook and Twitter remake the media landscape.
"It's really necessary in an age where Google and Facebook and Twitter are becoming increasingly careful about how they direct traffic for free," Ian Sigalow, a partner at Greycroft Partners, a venture capital firm that has invested in rival ad tech companies, said by phone from New York. "It's hugely scalable, it's going to make a lot of money."
Outbrain and Taboola make their recommendation algorithms free to web publishers like Time.com or CNN.com, who use them to promote their own stories.
The startups make money by charging outside parties -- publishers looking to buy more traffic, or companies marketing products -- to have their links included in the algorithm's index of recommended articles. If a reader clicks on a link that takes them off the host publisher's site, Outbrain and Taboola get paid, and they split that revenue with the publisher.
Taboola and Outbrain are the dominant distributors of so- called sponsored content, or ads designed to mimic news stories, a niche of the advertisement industry that's forecast to reach $3.4 billion in revenue by 2018, according to Business Intelligence.
To go public, Outbrain will have to distinguish itself from the last wave of ad tech IPOs, many of which did not end well for investors, said Sundeep Chanana, a partner at Waller Capital Partners, a New York-based investment bank focused on technology and media companies.
Rocket Fuel, a digital-advertising firm that went public at $29 a share in 2013 and sold equity again in 2014 at $61 a share, now trades at $12.34. Millenial Media, a mobile-ad company, has tumbled almost 90 percent from its IPO price.
The ad tech industry is still nascent and sales are highly variable because they're based on clicks, something stock investors don't like, Chanana said.
Taking ad tech firms public "is like trying to fit a square peg in a round hole," he said.
Taboola generated more than $200 million in revenue in 2014, compared with less than $10 million in 2008, according to founder and chief executive officer Adam Singolda. Outbrain's revenue is 25 to 30 percent higher than that, according to a person familiar with the company's sales.