Futures Lab Update #88: Attracting Investment Capital and Reaching Young Local Readers

    by Reuben Stern
    January 8, 2015
    Vice Media attracted $250 million in investment last September. It and other digital startups like Vox and BuzzFeed are attracting more and more funding from venture capitalists. Screenshot courtesy of RJI.

    This week we find out why investors are bullish on online media startups, and we find out how the Philadelphia-based startup Billy Penn is producing local news coverage aimed at younger readers.

    "Right now the millennials are trying to find the appropriate voice for them, and Vice is that voice. And I think one of the things that millennials love about Vice is its authenticity." -- Woody Marshall, general manager, TCV

    PART 1: Why investors love media startups

    Digital media startups like Vice, BuzzFeed and Vox Media have grown quickly thanks to hundreds of millions of dollars of venture capital. We find out why investors are so willing to bet on these new companies instead of putting their money into established news providers.
    Reporting by Tatiana Darie.
    [To skip directly to this segment in YouTube, click here.]


    A look at the numbers:

    • Vice Media landed a $250 million investment in September from Technology Crossover Ventures, a Silicon Valley–based company that has Facebook, Spotify and Netflix in its portfolio. That financing followed a previous $250 million investment from A&E Networks, a joint venture owned by Hearst and Disney. The investment brings the total valuation of Vice Media to about $2.5 billion.
    • BuzzFeed raised $50 million in new funding in August from the venture-capital firm Andreessen Horowitz, which placed the company’s total value at nearly $850 million. This article from Slate helps explain BuzzFeed’s valuation, saying the company “has walked a fine line between new-media platform and technology-first startup.”
    • Vox Media recently landed a $46.5 million investment from General Atlantic, an investment firm with offices in New York City and Connecticut. The latest financing puts Vox Media’s valuation at roughly $380 million. That far exceeds the $250 million Amazon’s Jeff Bezos paid for the Washington Post in 2013. (For more on Vox Media’s operation and strategy, check out our previous report, as well as our Q&A with Chairman and CEO Jim Bankoff)

    PART 2: Targeting young local readers at Billy Penn

    Billy Penn is a startup news operation in Philadelphia that aims to provide local, mobile-friendly news specifically for residents under age 35. We learn from the site’s editor, Chris Krewson, how they hope to attract a younger audience with a mix of curated news and social content.
    Reporting by Katy Mersmann.
    [To skip directly to this segment in YouTube, click here.]

    For more information:


    As this article from Nieman Lab explains, Billy Penn is “developing a voice for the site that’s punchy and direct,” which has included “some kitschy things, like live-tweeting a gubernatorial debate in emoji, a weekly Spotify playlist that chooses songs to summarize the week in news, or a bracket to determine the Ultimate Philly Thing.” The article also profiles the genesis of Billy Penn and provides a more detailed explanation of the organization’s internal workings.

    As CJR points out, Billy Penn is part of a batch of news-related digital startups being launched in a city that has seen several previous attempts eventually shut down.

    Reuben Stern is the deputy director of the Futures Lab at the Reynolds Journalism Institute and host and co-producer of the weekly Futures Lab video update.

    FuturesLabWebBanner-mediashiftThe Reynolds Journalism Institute’s Futures Lab video update features a roundup of fresh ideas, techniques and developments to help spark innovation and change in newsrooms across all media platforms. Visit the RJI website for the full archive of Futures Lab videos, or download the iPad app to watch the show wherever you go. You can also sign up to receive email notification of each new episode. 

    Tagged: authenticity billy penn buzzfeed demographics futures lab hyperlocal millennials philadelphia rji Venture Capital vice vox

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