Outbrain Outsmarts Them All. Secures $12M Second Round.

Yaron Galai is a lot of things to a lot of people. If you didn’t already know that he’s one of the most successful Israeli hi-tech entrepreneurs of all time, the soft spoken family man would strike you as more comfortable on a kibbutz than in a board room. What sets Yaron apart from the digerati of Israeli hi-tech is his selfless work helping fellow Israeli entrepreneurs. 

Whether mentoring students, matchmaking for Angels, defending friends or voluntarily helping young startups with priceless insight, direction and introductions, Yaron is always nudging and inspiring others towards success. It’s for this reason that I’m particularly happy to announce that Yaron’s current startup, Outbrain, a content rating and recommendation engine for blogs, has secured a recession-busting $12M second round of financing. The round, which brings Outbrain’s total funding to just over $18M, was led by new investor Carmel Ventures, with Zohar Gilon and Rhodium also joining previous investors Gemini,  Lightspeed and GlenRock Israel in filling out the round. Shlomo Dovrat, co-founder and general partner of Carmel Ventures will be joining Outbrain’s board of directors. Nice.

$12M for a blog plugin you say? I have to admit that if it wasn’t for Yaron at the helm, I’d be scratching my head on this one as well. At first glance (see yellow stars at the bottom of this post) Outbrain is a chimp-simple plugin for blogs that lets readers rate posts on a 5 star scale and get recommendations for other posts they might like. Seems trivial and there are many similar plug-ins out there. Outbrain however gets interesting when you consider the massive amounts of aggregate data it collects about reader tastes and blog content. Combine that with some nifty semantic web recommendation algorithms, perhaps contextual ad targeting in the future, a CEO who sold his last user-preference-targeted ad network for $363M and a co-founding CTO who ran tech for a little shopping site that sold for $634M and you start getting the bigger picture that has investors clamoring to write Outbrain a check. With no short-term goals for revenue the bet here is that Outbrain’s exceptional management will figure it out. My personal bias aside (Yaron is a good friend), its a dam good bet. These guys are in it to build a big business over the long haul and having a ton of fun at it.

Most techfluentials didn’t get Outbrain when the quiet startup first launched in 2006 as just a rating plugin for blogs. The introduction of recommendations got people talking and the contextual content aggregation space has been heating up ever since. The torrid pace of content creation and fragmentation on countless publishing platforms makes the need for a common, intelligent content aggregration and recommendation platform vital for organizing the noise on the web. Outbrain’s early start and extra layer of user-supplied content rating data positions them nicely for defacto status. The service has grown 11X over the last year and makes millions of recommendations daily across thousands of blogs and sites.

Check out the smarter Yaron presenting Outbrain and some tips for entreprenuers at the Jan 5th TechAviv Founders Club Meetup:

Jump to 4th white dot on the timeline (1:06:20) 

Mazal tov Yaron, Ori and team on this impressive milestone, and kudos to the stellar group of investors that continue to support Israeli hi-tech in the midst of a shaky economy. Onward and upward.

Get the Outbrain plugin for your blog, follow Outbrain on Twitter and get wise and inspired at Yaron’s Blog.

Tagged as: carmel ventures, founder, Funding, gemini, glenrock, lightspeed, Outbrain, quigo, rhodium, second round, Shlomo Dovrat, shopping.com, yaron galai, Zohar Gilon

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