Investor funding into online media upstarts like Buzzfeed, Vox and Business Insider, jumped to over $800M in 2014.
Venture capital investors continue to invade the media industry with funding jumping to new highs in 2014. According to CB Insights data, digital news and media companies raised $813M in 2014. In 2013, startups in the space raised $331M.
In January, Business Insider announced a new $25M Series F financing at a $200M valuation from Bezos Expeditions and Axel Springer. In the same week, Mashable brought in a $17M Series B led by Time Warner Investments. Refinery29, another New York-based media startup focused on the fashion & lifestyle vertical, is reportedly raising new funding at a $240M valuation from investors including Hearst Corp.
Investors appear bullish that the new wave of media startups relying on digital technologies can create sustainable (and hopefully lucrative) business models. One such investor, Chris Dixon, a partner at Andreessen Horowitz, wrote after a $50M investment into Buzzfeed:
I believe the future of BuzzFeed – and the media industry more generally – will only get brighter as the number of people with internet-connected smartphones grows, and the internet solidifies its place as the central communication medium of our time.
Of course, it is worth noting that not all VC investments into media companies have fared so well. GigaOm, the influential tech news site, founded in 2006, and which was backed by True Ventures, Alloy Ventures and Reed Elsevier ventures and which raised over $22 million of VC backing according to CB Insights shuttered suddenly in March 2015 because it could not pay back its creditors (Silicon Valley Bank).
On a year-over-year basis, funding to digital news and media companies spiked 145% in 2014 driven by a pair of $250M investments into Vice Media in Q3’14.
New York is the old and new media epicenter
New York-based startups have been the biggest recipients in the digital media & news funding boom. Over the last two years, New-York based startups have taken 45% of all deal activity in the space. Outside of New York, notable deals last year included Los Angeles-based Woven Digital, which raised an $18M Series A led by Institutional Venture Partners and Vox Media’s $46.5M growth round led by General Atlantic.
Top 5 most well-funded digital news & media startups
As the digital news & media space sees an influx of investment, a number of startups are becoming very well-funded. Skift CEO Rafat Ali previously referred to some of these companies as ‘fat content’ startups. Below are the 5 most well-funded private digital news & media companies, which have taken over $1B in investments.
| Rank | Company | Total Funding ($M) | Select Investors |
|---|---|---|---|
| 1 | Vice Media | $570 | Technology Crossover Ventures, A&E Television Networks |
| 2 | Mode Media | $199 | Accel Partners, Draper Fisher Jurvetson, DAG Ventures, Information Capital |
| 3 | Vox Media | $125 | Allen & Company, Accel Partners, Comcast Ventures |
| 4 | Buzzfeed | $96 | Softbank Capital, Hearst Ventures, RRE Ventures, Lerer Hippeau Ventures, NEA, Andreessen Horowitz |
| 5 | Business Insider | $56 | Allen & Company, RRE Ventures, Institutional Venture Partners, Bezos Expeditions |
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