The explosive growth in demand for web data extraction tools over the past decade has fueled impressive expansion for proxy management platforms like Oxylabs and Webshare Software. By acquiring Silicon Valley upstart Webshare, Lithuania-based Oxylabs has made a bold move to consolidate its leadership in this fast-evolving market estimated to be worth over $2 billion globally.
The Rapidly Evolving Web Data Extraction Landscape
The market for web scraping and data harvesting solutions has seen meteoric growth in recent years. Fueled by surging demand across many industries – from ecommerce to cybersecurity to finance – the market grew at an estimated 22% CAGR from 2016-2021.
Leading proxy and data extraction providers have seized this opportunity to help companies across many verticals automate the collection of massive datasets from websites and public online sources. Several clear leaders have emerged in this space:
| Company | Founded | Key Products | Annual Revenue |
|---|---|---|---|
| Oxylabs | 2015 | Residential/mobile proxies, web scraping, data extraction | $50M+ |
| BrightData | 2012 | Web scraping, residential/datacenter proxies | $40M+ |
| Apify | 2015 | Web scraping, crawling infrastructure | $30M+ |
| ParseHub | 2013 | Web scraping for non-developers | $15M+ |
However, industry analysts predict more consolidation is coming as companies seek to expand their capabilities through acquisition. The Oxylabs/Webshare deal is likely just the first of many moves to defend market share and accelerate growth for leading players.
Oxylabs – A Proxy Industry Leader Expanding Global Footprint
Founded in 2015 by a group of web scraping enthusiasts, Oxylabs has quickly become a leading global provider of proxy-based data harvesting solutions. Based in Lithuania, the company has seen explosive growth fueled by strong demand from enterprise customers.
Oxylabs now generates over $50 million in annual recurring revenue from over 300 blue chip clients around the world. The company offers a wide range of residential and datacenter proxies optimized for different web scraping use cases.
After raising $9 million in funding in 2021, Oxylabs is looking to aggressively expand its market footprint. The company is on a hiring spree after moving to a new 5-story headquarters in Vilnius last year that can accomodate up to 350 employees.
According to CEO Julius Černiauskas, the acquisition of Webshare advances Oxylabs‘ core strategic goal: "to become the undisputed, globally recognized industry leader."
Webshare Software – Fast Growth in Self-Service Proxy Space
Founded in 2019 by veteran entrepreneur Utku Zihnioglu, Webshare Software has achieved stellar growth and recognition in just a few short years.
The Silicon Valley company has developed proprietary technology for self-service residential proxies. Webshare‘s intuitive platform allows users to quickly deploy proxies on demand through a dashboard. The company also handles proxy maintenance and optimization in the background.
This self-service model has proven extremely popular, attracting over 10,000 active customers from enterprises to startups to individuals. Webshare also stands out for its competitive pricing, offering monthly plans starting at $49 for 5GB of traffic.
Beyond its customer base in the US, Webshare bolsters Oxylabs‘ presence in the self-service proxy space – an area rivals like BrightData currently dominate.
Diving Deeper Into the Deal Dynamics
Oxylabs hasn‘t disclosed specifics on the acquisition value or deal structure. The transaction was financed through Oxylabs‘ cash reserves and closed in just 5 weeks after talks began in late August.
Industry observers believe Oxylabs was willing to pay a premium valuation given Webshare‘s rapid growth and large blue chip customer base.
For Oxylabs, the strategic rationale is clear – acquire Webshare‘s proprietary proxy technology, inherit 10,000+ customers from Fortune 500 brands to startups, and establish a stronger foothold in US enterprise markets.
For Webshare, the backing of a larger player allows the company to accelerate expansion plans. According to CEO Utku Zihnioglu, "Through our combined forces, we will be able to continue scaling quicker and more efficiently."
Oxylabs has stated that Webshare will continue operating as an independent entity. The company sees value in maintaining the Webshare brand given its recognition in self-service proxy space.
Realizing the Strategic Vision
To fully realize the potential of this acquisition, Oxylabs will need to successfully integrate Webshare while allowing it to preserve its unique identity.
Here are some of the key next steps and potential pitfalls to navigate:
- Product Integration: Connecting Webshare‘s proxy services with Oxylabs broader data extraction platform and integrations.
- Technical Obstacles: Merging infrastructures, managing API compatibility, preventing service disruptions.
- Organizational Alignment: Coordinating teams spread across multiple countries to leverage synergies.
- Cultural Integration: Blending work cultures and norms across both companies.
However, if done well, the combined company has an opportunity to offer customers the most comprehensive web data extraction solution on the market.
Oxylabs executives have hinted at some areas where Webshare‘s technology could enhance their roadmap:
- Expanding self-service proxy offerings
- Providing additional flexibility for users to customize proxies
- Exploring new pricing models like proxy "pay as you go"
The integration process will take at least 6-12 months by most estimates. But the company has bold plans to come out the other side as the dominant player in the data extraction space.
Outlook for Further Consolidation Ahead
Within the broader proxy/data extraction industry, competitors are likely assessing their own strategic options in the wake of this acquisition.
Experts believe other top players may look to consolidate, including:
Buyers
- BrightData – Has raised over $76M and is also on an aggressive growth trajectory
- Apify – Recently raised $5M, could look to acquisitions to expand features
Potential Targets
- GeoSurf – Offers niche proxy solutions for ad verification, social media intelligence
- ProxyRack – Present in Asia market, where Oxylabs has little presence
- Storm Proxies – Fast-growing low-cost residential proxy service
Of course, competitors could also forge partnerships or make pivots in their own product roadmaps to counter the expanded Oxylabs platform.
The next 6-12 months will be telling in terms of how the acquisition reshapes the competitive landscape. But Oxylabs has clearly forced their hand and cemented their position as the leader to catch.
Conclusion
By acquiring upstart Webshare Software, Oxylabs has made a strategic bet to accelerate its growth trajectory and strengthen its grip on the rapidly evolving web data extraction market.
This deal adds impressive proxy technology, inherits 10,000+ enterprise customers, and gives Oxylabs a stronger foothold in the US market. The combined company also boasts the most comprehensive suite of web scraping and data harvesting solutions globally.
However, successfully integrating Webshare‘s teams and technology will be critical in realizing the full benefits. If Oxylabs can achieve this while maintaining Webshare‘s identity and rapid growth, they will be poised to dominate this $2B+ industry as it continues maturing.
But with other players also hungry for growth, we can expect more consolidation and competitive maneuvers in the months ahead. Oxylabs has fired the first shot; it remains to be seen how rivals will respond to the new competitive threat its acquisition of Webshare Software represents.
