Do You Want To Read This Story? (Outbrain Knows)

New York startup Outbrain announced yesterday that it has raised a massive $35 million in its fourth round of financing.
Business Writers
December 15, 2011

You don't know if you want to read this story, but there's a company that thinks it does know, and investors are betting $35 million on it.

Content recommendation startup Outbrain has raised a massive $35 million in its fourth round of financing, it announced today.

The New York-based company, which aims to help people find interesting content before they even know they want it, has raised $64 million in total. (It closed an $11 million round of funding in February.) In order to search for something, you have to know it exists and that you want it, the company says. Its mission is to let you know what is out there that you’ll find worth viewing.

The company was founded in 2006, in the era before smartphones were near-ubiquitous and tablets abounded. It plans to use the money to expand internationally (it’s already in France and Germany) and to spread its reach to a variety of devices.

“There are other screens and devices where people consume their favorite content, and we’d love for Outbrain to be of service in those places,” Outbrain CEO and co-founder Yaron Galai wrote in a blog post Wednesday.

Geneva, Switzerland-based Index Ventures (it invested in Skype) led the round—and the firm’s Dominique Vidal will join Outbrain’s board of directors. Vidal formerly was CEO of Yahoo Europe.

Outbrain makes money from paid distribution; publishers such as Conde NastCNN and USA Today pay to have their related or relevant articles turn up as recommended on another publication’s site.

Earlier this year, Outbrain made its first acquisition: Surphace, an AOL-owned competing recommendation engine. The price was not disclosed.

Galai previously was a founder at contextual ad network Quigo. That company, founded in 2000, let advertisers buy sponsored listings, a la Google’s AdSense. AOL bought the company in November 2007 for a reported $340 million.

Outbrain’s recommendations are viewed more than 3.5 billion times every month and lead to over 200 million clicks, according to company figures.

The funding will also be used to improve its recommendation algorithm.

"We’ve achieved exceptional milestones this year—from the acquisition of Surphace out of AOL to the launch of our European offices in London, France and Germany to the rollout of Outbrain for Mobile and Outbrain for Video," Galai said. "Having established a leadership position in all these areas, we are now poised to bring great content to audiences across the United States, Europe and the entire world.”

Image credit: Courtesy company

Business Writers