Investment in digital media slows, years after venture-backed boom

Media upstarts are attracting far less cash compared to the venture-backed media boom of 2014 and 2015, according to new data from Pitchbook.

Why it matters: Investors are no longer willing to shell out hundreds of millions of dollars on new digital media sites, given how long it's taken for some of those investments to materialize and drive major returns.

Be smart: A handful of media companies have successfully raised money recently, helping to fuel the growth of new upstarts.

• Puck, a splashy new digital media company launching in September, raised $7 million in a Series A funding round earlier this year led by 40 North Media, a related investment business of Standard Industries, and private equity giant TPG Growth.
• Recount Media, the two-year-old startup founded by veteran journalists John Battelle and John Heilemann, raised $18 million in a series B funding round led by Foundry Group in May.
• An unnamed company made up of a group of D.C.-based veteran journalists said in July it raised more than $10 million to launch a new politics and tech website.

Yes, but: The raises are relatively small — especially compared to the hundreds of millions of dollars that companies like BuzzFeed, Vox Media and Vice Media attracted years ago — and have come early in these startups' trajectories.

• Some companies that show high growth potential have been able to draw bigger investments over time.
• The Athletic has raised a total of $139.5 million since its launch in 2016. Group Nine Media has raised $190 million since its launch in 2016.

What's next: Digital media giants that raised a fair amount of cash years ago are now looking to go public via SPACs (special purpose acquisition companies).

• Some, like Vice Media, are reportedly struggling to raise enough capital to finance such deals.
• Others have been able to successfully raise enough money to acquire other companies to give them the scale they need to trade on a public market. BuzzFeed, for example, is acquiring Complex as part of a SPAC deal worth $1.5 billion.

What to watch: Many of these startups gain enormous traction leveraging the nimble freedoms of the startup world, only to wind up selling to corporate titans when growth slows down.

• Parenting publisher Some Spider Studios, for example, raised $10 million in 2017, and recently sold to BDG Media for around $150 million.