Nasdaq IPO Completed by Outbrain at a Disappointing Valuation of $1.12 Billion
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In recent news, Outbrain managed to seal its IPO at a valuation of $1.12 billion, thus raising a total of $160 million. Just last week, the Israeli internet recommendation company had revealed that it was hoping to raise somewhere around $200 million, valued at $1.4 billion when it went for its initial public offering on the Nasdaq. However, its hopes were in vain.
The company had tried to sell no less than 8,000,000 shares, each priced somewhere between $24 and $26, but was unsuccessful in doing so. The prices of the shares had been deemed unrealistic, forcing Outbrain to settle for a lower valuation. This was quite disappointing, given that the company had hoped for a $2 billion valuation earlier in the year.
Earlier in the month, the Israeli corporation announced that it had been able to secure funding of $200 million from The Baupost Group, an investment manager based in Boston. It is responsible for managing around $31 billion, which it invests in a broad range of asset classes, such as real estate, private debt, private equity, and significant holdings in equity securities and publicly traded debt. Since the year 1982, when the company was founded, Seth Klarman, the Portfolio Manager, and CEO has been seeing to the investments made by Baupost.
In the first quarter of the current year, Outbrain has grown at a rate of 29% and reported a revenue of around $228 million.
Unlike the majority of Israeli companies that trade in New York, the internet recommendation firm announced a bottom-line profit of a figure of $10.7 million in the first quarter of 2021. In the first quarter of the previous year, Outbrain revealed a revenue amounting to $177.3 million. It further informed that it had lost $9.5 million. The cash balance at the end of the first quarter of the current year was posted at $95 million.
On the other hand, the Israeli internet recommendation corporation ended the year 2020 by posting a revenue of $767.1 million. It recorded its growth rate at 11%, which was deemed relatively moderate on account of the slowdown faced by companies across the globe when the coronavirus first surfaced. However, Outbrain indicated that its operating profit had been of $10 million, which was a first, especially compared to the loss it had suffered of $4.5 million in the year 2019. Ultimately, the net profit of the company amounted to $4.4 million, as compared to a net loss of $20.5 million in the previous year.
Two brothers from Israel, Eytan and Yaron Galai founded Outbrain. The latter also now serves as co-CEO along with David Kostman, who happens to be the chairman of NICE. Right before the IPO took place, he was chosen to be the chairman of the company. In addition, as of now, the VP of technology of the Israeli internet recommendation company is Ori Lahav.
