Mar 10, 2020 - Economy

Scoop: The Recount raises $13 million in Series A round

The Recount co-founders John Heilemann (left) and John Battelle (right). Photo: The Recount.

Recount Media, a short-form political video startup created by veteran journalists John Battelle and John Heilemann, has raised $13 million its Series A funding round, executives tell Axios.

Why it matters: The round includes strategic media companies as partners, instead of just financial investors. "It's better to have big companies looking out for us and rooting for us than a bunch of purely financial investors around the table," Battelle tells Axios.

  • Battelle first noted the round on stage to Axios at an IAB conference last month.

The big picture: After a difficult year for many digital media companies in 2019 and with a possible recession looming, digital media executives seemed mum on throwing more dollars at slow-growth media startups.

  • But recent investments in The Athletic ($50 million), Axios ($20 million), Minute Media ($40 million) and Quibi ($750 million) suggest that investors may still have confidence in digital media startups.

Details: The round is being led by Union Square Ventures.

  • Also in the round: True Ventures and strategic partners ViacomCBS and Burda Principal Investments, a division of Hubert Burda Media.
  • The money will be used to produce new programming that will help The Recount strike additional licensing and distribution deals. According to Battelle, the company will be announcing new programming every few weeks.
  • Some of the investment will also be going towards making sure that The Recount builds strong enough infrastructure to be able to deploy video across multiple distribution points. "It's not a big of an issue in text, but it's definitely a bigger issue in video," he says.

Investors who participated in Recount’s seed round include Kevin Durant’s Thirty Five Ventures, Ron Conway’s SV Angel and Robert Wolf’s 32 Ventures.

  • The Recount's board has five slots, two currently open. Battelle and Heilemann both sit on the board, as well as Union Square Ventures' Fred Wilson. Media investors have informational rights, but are not members of the board,
  • The Recount currently has a staff of 20 people, mostly journalists. About 5 of them are on the company's "original content" team launched earlier this year. Battelle said the company could hire up to 15 people in the next 15 months.

The Recount is in talks with dozens of distribution channels, including tech companies like Google and Amazon, smart TV companies like Samsung and Roku, and streaming TV companies, like FuboTV and Quibi.

    • "Its a real jigsaw puzzle," says Battelle. "There's so many places to have a sliver of what is a massive market."

The company makes money from licensing its content, as well as ad revenue splits with some distribution partners and sponsorships. Bank of America and Slack were the company's launch partners. The company also sells ads within its newsletter, and is developing a conferences business.

Be smart: The investment from ViacomCBS stemmed from a pre-existing relationship between Showtime and The Recount. John Heilemann is the host, executive producer, and creator of Showtime's THE CIRCUS, a weekly political documentary series.

  • The Recount currently hosts "The Center Ring" series on its website that includes never-before-seen footage from Showtime’s The Circus. The partnership to air the footage is being renewed with the financing round.
  • Battelle says The Recount is in talks with ViacomCBS about other places where their content could live within the ViacomCBS umbrella.
  • It hopes its strategic investment from Burda Principal Investments will help the firm grow internationally at some point.

What's next: The Recount's has announced a slate of new programming featuring political pundits such as Alyssa Mastromonaco, Mike Murphy and Liz Plank.

  • Battelle says that while the content is more analysis than breaking news, it's done with journalism in mind.
  • "We're building this entirely in the vertical of politics to start. We're not trying to be a broad click-based news service. We want to build a journalistic brand."
  • Battelle says The Recount's audience won't be insiders, but rather everyday people who want to better understand really important stories of the day.
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