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Israeli Analytics firm SimilarWeb makes public debut on the NYSE

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Or Offer, SimilarWeb Founder & CEO, joins Yahoo Finance Live to discuss the data analytics company’s public debut on the NYSE and business outlook.

Video Transcript

[MUSIC PLAYING]

- Welcome back. Let's turn now to a company that started trading just a few moments ago, and that's the data analytics company SimilarWeb. Now, the company priced above range at $22 a share, with a valuation of more than 1 and 1/2 billion. We've got Or Offer, SimilarWeb founder and CEO, and Yahoo Finance's Adam Shapiro joining us now.

So Or, this is a bit of a rough day to start trading, to say the least. Now, you're expected to raise more than $150 million today. What expansion or growth plans can investors expect from all of this capital?

OR OFFER: Yeah, it is. We chose a tough day to go out at the market here on the [INAUDIBLE]. It looks like the markets are red. But you know, we are excited, and we are planning to use the capital we raise in order to accelerate the growth we are seeing for the first few quarters. That, we are very excited. And you know, mostly doing marketing, brand awareness. Also, trying to look more heavily on M&A and M&A motion. That is something that we didn't do in the past, and we think there is great growth opportunity.

ADAM SHAPIRO: Or, it's Adam, and it's good to have you here. Congratulations. I'm having a little difficulty hearing you because your audio is a bit low. I don't know if the folks controlling your mic can boost it. But I am curious, a lot of people are not familiar with what SimilarWeb does. I've been fortunate to use your services in aggregating data for stories we've written. So give us a quick overview of how, for instance, a hedge fund may buy the kind of data you have access to, or even a company like LEGO might use the data that you are collecting from all of our smartphones and website visits?

OR OFFER: So first of all, good to see you, Adam. I will try to speak loudly. And excited to be here. So SimilarWeb is specialized in understanding how the digital world behaves. We are having really amazing insight about every website and app that's out there. And we are also considered, I will say, one of the best alternative data sources to evaluate digital companies.

So if you, as an investor, want to understand the performance of a digital company, and you're looking for good, great signals that have really good correlations with how the stock behaves, SimilarWeb has a great offering. And this is how, for example, investors are using us.

If you're looking around the brands, and now, they usually use SimilarWeb is mostly for competitive intelligence, to find more growth opportunity, to understand what keyword they should go after, which affiliate will work, what the competition is doing online to drive traffic. Really, they're getting digital visibility.

ALEXIS CHRISTOFOUROS: Or, it's Alexis here, and I'm going to echo what my colleague said. Congratulations on coming to the public market. Given what you do, sort of at the core of what you do, is collecting data, right? And there are lots of rules and regulations, seemingly changing every day, around that collection. What kind of a risk factor is that for your company going forward, when it comes to data privacy?

OR OFFER: Yeah, so we college, as we call, digital signals-- a lot of the signals that help us to do the prediction and the estimation of how the internet behaves. You know, there's a lot of, you know, changes now in the privacy regulation. We're seeing two things happening.

One, cookies on the web are being removed. And from the other, you have on the app ecosystem. Apple is now putting-- it's an IDFA, they call it-- to not enable the ad network to [? really ?] target users. So those changes that happened, I think, will affect mostly the ad network and the attributions ecosystems. They are not affecting companies like us who do mostly market research, because we care about the internet as aggregated-level data. We don't have user data. We don't do ad targeting, et cetera. So we don't see any change of concern regarding our markets.

ADAM SHAPIRO: Who are the biggest clients for what you provide? Is it private money managers, hedge funds, venture capitalists, or is it the companies that want to use it to improve their market?

OR OFFER: So it's both. We have five lines of business, that each one of them is a unique product. One product is called marketing intelligence, solutions for market [INAUDIBLE]. There are big brands buying it to drive a strategy around traffic acquisition.

And then we have the investor solution. That is, basically, investors want to get great signals. And a lot of-- we are having hundreds, I think we have hundreds of hedge funds and quant funds as customers, heavily using our data to build models for the public digital companies. It's a very successful industry for us, and last year was the most growing vertical in the company. So we're very proud of the team, that they're executing extremely well.

ALEXIS CHRISTOFOUROS: Or, question for you here. Why did you decide to go the traditional IPO route, especially considering that so many companies lately have decided to go public via SPAC?

OR OFFER: I felt so confident about our company offering, and I want to come all in through the front gate. I didn't want to look for something that would feel like a shortcut or a backdoor, so I wanted to come all in with our amazing company, in the front gate, and say, we are here, and we're gonna be staying here. We're gonna be an amazing company.

ADAM SHAPIRO: Hey, Or, last question for you, very quickly. The total addressable market, $34 billion. You're going to face competition, but why do you explain, or how do you explain to your clients, that you already have a leg up?

OR OFFER: Sorry, Adam? I'm not sure I understand the question.

ADAM SHAPIRO: How do you tell your potential clients that you're already way ahead of the competition? This market's worth $34 billion. I don't think you're gonna be able to [INAUDIBLE] this alone.

OR OFFER: Yeah, so far, there's a lot of greenfield opportunity in our market. And I think for us, when you're going into customers, they all really understand that we are the best provider in our market, and we are the leader. And we have really great success, you know, winning and capturing more market share.

And you can see it, that in the past three years, we were able to grow every year on bigger numbers. So we are accelerating our growth. And even if you look on the past four quarters, see the amazing growth we're seeing. And we feel very confident about it going forward. So I'm really excited about the momentum we have and our ability to capture this really huge market.

ALEXIS CHRISTOFOUROS: All right, we're going to leave it there. Or Offer, founder and CEO of SimilarWeb, thanks so much for joining us on the day your company comes to the New York Stock Exchange.