Taboola founder and CEO Adam Singolda found his first investor at a 2007 bat mitzvah. It was the investor’s daughter’s bat mitzvah, and Singolda hadn’t even been invited.
“It was a party next to the shore, it was 7 P.M., and I asked myself when to approach an investor whose daughter was having her bat mitzvah without coming off as weird, especially since I hadn’t really been invited to the party,” he recalled, laughing.
“I approached him only at 10 P.M., and I made a pitch. I explained that Google is great, you can find anything you want to look for – but what happens when you don’t have any idea what you want to look for? You need a recommendation engine,” recalled Singolda. He met with the investor one more time, and closed a $180,000 investment.
How do you explain what Taboola is today?
“The world’s biggest search engines are Facebook, Instagram or Wechat in China – where you open your feed, you don’t know what you’re looking for and you just discover things. Facebook makes $50 billion from people clicking on things they didn’t know they wanted to know, but liked. Taboola is like that – but for the rest of the world. We’re a recommendation engine embedded into content websites. You see us when you read an article and at the bottom is a selection of links introduced by ‘You may also like.’ It’s a business that takes in more than $1 billion a year.”
Singolda explains that advertisers pay only if users click, and that the hosting website receives a portion of the fee.
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“If you clicked on an article on Ynet about someone flying to the moon, then RedBull competes based on the price per click it sets on the advertising exchange [a platform for content providers selling spots to advertisers]. Taboola tries to choose the most appropriate content site for users,” he says.
What’s happening with Outbrain, Taboola’s main competitor?
“Outbrain is an amazing company, and it’s really cool that two [Israeli] companies, from Netanya and Ramat Gan, make content recommendations for the whole world. I also think competition is great – to be a company in a field without competition means you’re doing something that’s not interesting.”
The competition with Outbrain exacts a high price.
“Actually we’re nice competitors. I don’t know their numbers well enough, but I know Taboola’s numbers and we’re growing. In 2012 we sold $1 million in content recommendations; in 2015, $330 million and in 2018, $1 billion.”
That doesn’t mean you’re not eating away at each others’ profit margins.
“During the past four years we competed like crazy and we still doubled our profit margins.”
When will you merge?
“We’ve been talking about this all the time for a decade, but the chances are low. A merger means taking two companies that think they’re doing well on their own but want to be together. It’s not trivial, and it’s even less trivial when it’s two Israelis.”
You just had a new son born.
“True, and I have lots of energy. There’s nothing like being a start-up worker with a child, it makes you focus on what’s really important, which meeting not to hold. How to be home at 6 P.M. for bath time.”
Taboola was founded 11 years ago, and has raised $160 million to date. Asked whether the investors aren’t pushing for an exit or IPO, he answers, “We’re lucky, because they’re patient. If you put a dollar into Taboola at the beginning, it’s worth a ton now, and the investors believe they’ve done the right thing. We’ve been profitable since 2014 and they’d be happy if we were public, but they trust us to do it at the right time.”
Market sources estimate the company earned $100 million last year.
The company also went through tough times, particularly between 2007 and 2011, Singolda recalls. He almost shut it down three times – meaning he had only enough money left for 60 days.
With the public and regulatory onslaught against Google and Facebook, and the fear of mergers in your field, could anyone buy you?
“Google and Facebook have their own problems, and I’m not sure they want to enter our field. I also don’t know who would buy a company as large as Taboola. At this pace we’ll be worth billions and we’ll be bigger than Twitter [a company valued at $30 billion]. Taboola deserves to be a public company like Wix. It’s part of a new generation of Israeli companies that can live forever, and I hope to be part of it.”
Taboola is considered an adtech company, a field looked down on.
“It’s disappointing. We call ourselves a recommendations company. Taboola gets 20 billion clicks from people a year, and the typical American sees us two or three times a day. These types of clicks don’t come from typical advertising – we’re more of a recommendations company than a banner ad.
“People look at our news feed and scroll through 70 recommendations – you wouldn’t do that with ads.”
Taboola has some 1,200 employees in 17 offices around the world. You’re probably the only company of that size without a spokesman or a PR office.
“I think that in the world of Facebook and Tinder, we’ve actually lost part of the personal connection. … How to answer hard questions authentically – it’s close to my heart, and I imagine what a journalist would feel after going through three people before talking to someone at the company. It’s also good for the workers and for hiring, because people who write about the company are writing from a place close to it.”