The first thing you have to know about Or Offer, the charismatic young CEO cofounder of Israeli startup SimilarWeb is that he thinks big. Really, really big.
And that’s how he wound up running a company called SimilarWeb that seemed to spring out of nowhere a couple of years ago to become a star in the web and mobile app analysis world.
SimilarWeb has been profitable almost from the get-go, has raised more than $US40 million, all from long-term strategic investors including British billionaire David Alliance and Africa’s huge internet investment conglomerate Naspers. (We were told the total funding amount but we promised not to share.)
While Offer also isn’t publicly sharing the valuation for his company, word on the street in Israel is that if SimilarWeb isn’t a unicorn yet, it will be soon.
The company’s growth has gone bonkers since 2013, when it released its competitor to Alexa, the Amazon-owned Web analytics firm. In the past year alone SimilarWeb grew from 60 employees to 200 and is hiring in New York and Israel like crazy, recruiting about 20 people a month, Offer says.
And it all happened because Offer was trying to build a jewellery business.
Stalking David Yurman on the internet
Offer’s parents are artists. His dad a painter and sculpture. His mum a jewellery designer He finished his three-year tour in the army (a requirement for all Israeli citizens at age 18), and had to find a career.
“I decided I would go back and scale my mother’s workshop into a big empire, like Pandora with her brand name,” he said.
He started selling to more jewellery stores and then directly to consumers. Employees grew from 10 to 20. He hired factories in India and China to make the products. He and a buddy started to open a chain of jewellery stores.
One day, he had a meeting with a partner selling the jewellery in the US who told him that his designs were beautiful and very similar to David Yurman, the uber popular American designer.
“I said, I don’t know him,” Offer told Business Insider. “He was looking at me like you don’t know David Yurman? He’s a big thing in the US. I went home and researched David Yurman, saw this amazing jewellery design and immediately fell in love. I was shocked that I never heard of him, he was in my niche. I thought, I want to be like him, how could I never have heard of him?”
He wondered what other huge designers he didn’t know about.
“I want to see all the other sites on the Internet that had designers like David Yurman. Who are they? And I couldn’t find them,” he said.
The problem bugged him for days. “I was always a coder from a very young age. I don’t look like a computer geek, but I assure you I am,” he says.
“Then one night I had this vision that I would have something on my browser that there was something I could click that would say, ‘If you like David Yurman, here are all the other sites like his.’ It’s called website recommendation, similar to what you see on YouTube. I wanted the same thing for websites and I decided to build it,” he said.
He called a fellow geek from high school, who called two of his friends from the army, “a secret Israeli unit that did crazy coding” and in 2007 the four of them went to work.
“After a year and a half of bootstrapping, I was funding all of this from my jewellery business, we launch it in 2009,” Offer says.
SimilarWeb was born.
The browser plug in was a huge hit but there was a problem, there was no way to make any money from it.
A business model came to them
In a short while, internet researchers started calling them. The plug ins were collecting a lot of data about people’s surfing behaviours that these researchers wanted to buy.
“We had found a business model,” Offer laughed.
That encouraged them to build more apps, collect more data to sell.
And they were profitable. “but it wasn’t interesting,” he said. “In 2011, we wanted a better reason to wake up in the morning, to bring something very valuable to the world. We all want to build stuff that matters.”
In fact “Build stuff that matters” became his motto. He had a poster made and hung it on his office wall, across from the gorgeous original painting his dad gave to him. (SimilarWeb’s headquarters is filled with art made by his parents.)
“We decided we wanted to become the leading digital measurement company in the digital world. In 2011, we were crazy enough to think we would succeed. Our main goal was to take over Alexa,” he said.
They spent over a year building the product but when they showed it around, people “didn’t get it.”
So he scrapped it and started over. “At that point we had a lot of revenues coming from other sources. We were small but profitable back then, so we could take our time,” he said.
For instance, SimilarWeb had invested in a startup called AfterDownload that sold to another big-name Israeli tech company, IronSource, for $US28 million.
“We had a nice exit,” Offer smiles. He’s now become a big angel investor in Israel himself who’s backed a handful of other cool young companies.
Bigger than big
Offer says that from the start, “it was very clear that this was going to be big. The potential and market size was crazy big. Funny thing, we never understand how big it is. So every year it’s like, stop, it’s not a $US100 million business, it’s a billion-dollar business. And then, it’s not $US1 billion it’s a $US10 billion business,” he says.
SimilarWeb isn’t quite a $US10 billion business yet, but they do have one huge customer and investor: gigantic African internet investment conglomerate Naspers.
Naspers has backed about a hundred huge internet companies around the world outside of the US. It owns about a third of China’s Tencent and has stakes in Russia’s Mail RU and India’s Flipkart.
Naspers was using SimilarWeb to make investing decisions and in late 2014, an executive called Offers and asked to meet with him.
“Then they told me the dream that every entrepreneur want to hear: How much money do I want and at how much valuation? I threw some crazy numbers at them and they said OK. They are amazing investors and they are our biggest customers, our biggest fans.”
Because he has long-term investors instead of VCs, and the company is profitable, he’s in no hurry to go public, though he hasn’t ruled it out, he says.
“I started my way selling jewellery and ended up measuring the whole internet,” he laughs. “You never know where life is taking you.”
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.