While we suspect Buzzfeed founder Jonah Peretti has changed his tune after his company raised $19.3 million in Jan 2013 and was valued at $200 million, Peretti once lamented on Twitter that VCs won’t fund companies that employ journalists.
But it appears times have certainly changed. PaidContent founder Rafat Ali has dubbed the interest in and funding to companies such as Buzzfeed, Cheezburger Network, and Vox Media as the “dawn of fat content.” From blog networks to GIF hubs, companies that specialize in the production and distribution of content have drawn more than $143M in financing in the last year. While YoY funding activity has actually dipped 6% primarily because Q3’11 saw $55M in venture capital financing go to TechMediaNetwork and Bleacher Report, YoY deal activity has jumped nearly 36%.
Since the exits of Bleacher Report (acquired by Time Warner in 2012) and The Huffington Post (acquired by AOL in 2011), deal growth among companies in the digital content space has been strong with a number of early, mid- and late-stage financings. Among the content companies that got fatter in the last year were SAY Media, which raised a $27M Series E round from investors including New Enterprise Associates and Maveron as well as Glam Media which raised a $5M Series F round from pre-IPO investor Keating Capital. Investors are also giving the nod to newer content-based companies such as Freestyle Capital-backed 9Gag and EDM news site DJZ, seeded by investors including Google Ventures and Kleiner Perkins. In the past two years, nearly 53% of deals have come at the seed/angel stage as investors make bets on future fatties (sorry – we love alliteration).
As a global media capital, New York saw close to 39% of deal activity in the past two years for content-driven companies such as Buzzfeed, Business Insider and Thrillist Media. Interestingly, significant deal growth in fat content came from outside of the major US tech hubs as well, in both international and domestic locations. FTB Pro (Battery Ventures) and The Business of Fashion (Index Ventures) are based in London, for example, while companies such as Benzinga (Lightbank) and GameSkinny (CLR Ventures) were founded in Michigan and Virginia.
Details on the most active investors in the fat content (digital content) space can be found on the ‘Research’ tab here, after logging in to CB Insights. (Note: The list of most active investors is only available to paid subscribers.)