Outbrain’s IPO: A smart idea, a long time coming

By now we’ve all grown used to machines serving up recommendations for movies to watch, products to buy, food to eat, or things to do. Sometimes it seems like the algorithms know us better than we know ourselves.

But it wasn’t always that way. Back in 2006 Netflix was still shipping DVDs to peoples’ homes. Amazon Prime was barely a year old. And Outbrain had just launched in Israel.

If you’ve ever read the news on your laptop or mobile device, you’ve seen Outbrain. It’s what creates related stories around all types of content, personalized to your interests. Every day, Outbrain reaches more than 1 billion people across the globe, but when the company began in 2006, it was a true pioneer in content discovery. Since then it’s been imitated, but never truly equaled.

As an early investor I was drawn to the idea that great content recommendations will increase user engagement and, in return, drive monetization. This concept, along with confidence in the company’s founders, convinced Lightspeed to participate in the seed round and all following rounds.

It’s been an amazing journey, and I feel privileged to have seen it unfold from the beginning. I am especially proud to congratulate the Outbrain team on their initial public offering today.

Outbrain was founded on a simple principle: The more people consume content that they like, the more content they are likely to consume, increasing engagement and monetization.

By delivering personalized content recommendations to audiences, Outbrain has been able to generate more than $3 billion in revenue for the world’s largest media companies, including CNN, MSN, the Washington Post, Conde Nast, Sky News, LeMonde, and many more.

In a market dominated by Google and Facebook, Outbrain has become a vital resource for publishers to generate revenue independent of the two giants.

But getting content discovery right is not a trivial problem to solve. Adopting this once-radical approach to optimize for engagement required deep technological expertise, which Outbrain brought in the form of its two founders, co-CEO Yaron Galai and CTO Ori Lahav.

Today, the Outbrain Cloud relies on a proprietary, microservices architecture embedded via APIs into publishers’ content delivery systems. It processes more than 1 billion data signals in realtime to deliver 100 million content predictions per second, ultimately resulting in more than 40 million consumer engagements each day.

Outbrain has become the de-facto operating system for open web media owners. Partnerships with publishers, media brands and advertisers are have expanded, with click-through rates and revenue growing correspondingly.

Yet, despite the tremendous changes we’ve seen in the 15 years since the company launched, Outbrain itself has remained remarkably stable. Yaron and Ori, who originally met when both served in the Israeli navy, continue to run the company along with co-CEO David Kostman. Every member of its leadership team has been with the company for seven years or more.

Lightspeed has been investing in early-through-growth-stage Israeli-based companies for more than a decade, and Outbrain is one of several major public offerings to come out of Israel over the past month.

Becoming a public company is an epic milestone for any business. My warmest congratulations to Yaron, Ori, David, and the rest of the amazing Outbrain team on this achievement.

Lightspeed Possibility grows the deeper you go. Serving bold builders of the future.