Group Nine Media raises $50 million from Discovery and Axel Springer
Group Nine Media, which includes digital lifestyle brands like The Dodo, NowThis, Thrillist and Seeker, has raised $50 million from Discovery Inc. and German publishing giant Axel Springer.
Why it matters: It's one of the biggest digital media investments in the past year. Investors have been mostly bearish on digital content companies because they are hard to scale and usually aren't very profitable.
Details: The latest fundraising round brings Group Nine's total amount raised to $190 million. Both investors were involved in previous fundraising rounds and will retain a minority stake in Group Nine with Discovery as the lead investor, according to a statement.
- The company says that the additional funds will be used for continued investments in intellectual property, presumably content, and to fuel growth of its newly launched commerce division.
- In a statement, Discovery President and CEO David Zaslav said that Group Nine is the "standout in the evolving mobile ecosystem," suggesting that the partnership between the two companies would continue to focus on mobile-first and social media partnerships. The two companies currently jointly sell advertising campaigns.
Between the lines: The company's statement also noted that the funds will be used for "potential strategic acquisitions." Rumors have circled around Group Nine acquiring Refinery29 or merging with another large media company, like BuzzFeed, for months.
- According to the Wall Street Journal, which first reported the news, Group Nine has also been in touch with millennial lifestyle brand Popsugar.
Be smart: The appeal of Group Nine to potential media partners is that the company is one of the top social video publishers in America. According to Group Nine, audiences spend nearly 50 million hours a month cumulatively watching content from its brands.
- Yes, but: Last year's cheap sale of Mic brought a lot of press attention to venture capital-backed media companies, highlighting the risk that comes with raising lots of money to support ad-driven media business models.