May 3, 2022 - Technology

Exclusive: Decrypt splits from parent, raises $10 million

Illustration of gold coins stacked upwards over binary code
Illustration: Sarah Grillo/Axios

Decrypt, a media company that focuses on covering cryptocurrency and web3, has spun out from its parent company after raising a $10 million series A round at a $50 million post-money valuation, executives tell Axios.

Why it matters: The spin-out from ConsenSys Mesh — a blockchain incubator — allows Decrypt to be fully independent. The money raised will be used to hire more people for its journalism coverage and continue building out its business projects pegged to web3 initiatives.

Catch up quick: ConsenSys Mesh was founded in 2015 by Ethereum co-founder Joseph Lubin. The incubator provided seed funding for Decrypt to launch.

  • "It's an extremely tribal world of crypto," said Josh Quittner, CEO and co-founder of Decrypt. "Being actually independent is very different than knowing we are 100% paid for by ConsenSys (Mesh)." Quittner noted it was "always our intention to spin out."

Details: There is no lead investor in the round. The new capital comes from an array of over a dozen venture capital firms, DAOs, web3 organizations and angel investors in an effort to bolster Decrypt's independence from one controlling entity.

  • The funding structure "shows we are a true Web3 organization," said Daniel Roberts, editor-in-chief at Decrypt. "We're a news site, but we like to say we use the technology we cover."
  • Venture capital investors include Hack.VC, Hashkey Capital, Canvas Ventures, Protocol Labs, SK Group. Four DAOs, or decentralized autonomous organizations, also participated in the round, including, Global Coin Research DAO, Own.fund, Honey DAO, and Orange DAO.

By the numbers: Decrypt is spinning out as its business operations begin to grow revenue.

  • The company made around $1 million in revenue last year, and is expecting that to grow meaningfully this year, forecasting a possible bump to $5 million, said Alanna Roazzi-Laforet, publisher & CRO at Decrypt.
  • It currently sees around 5 million monthly unique visitors, although executives acknowledge that traffic fluctuates as frequently as the crypto markets. "Crypto media clicks fluctuate like the crypto environment," Roberts said.
  • The company currently has 27 full-time employees and is looking to hire more on both the business and editorial sides with the new capital.

Between the lines: Decrypt makes money via selling ads and event sponsorships, just as any other traditional digital media company would.

  • It also launched a creative lab called "Decrypt Studios," in which it charges clients to create metaverse activations and NFTs.
  • The company's studio charges clients either through a revenue share agreement or a production fee. Ads and sponsorships are sold either via a flat fee or on an impression basis. Decrypt accepts payments in crypto or fiat.

What's next: The company plans to invest heavily in its latest web3 initiative called PubDAO, a decentralized newswire that Decrypt launched in October alongside other journalist organizations and DAOs.

  • Although Decrypt is helping fund the initiative, PubDAO operates independently and has its own treasury and payment system.
  • The build-out of the initiative is being led by CTO and co-founder of Decrypt Ryan Bubinski, who also co-founded PubDAO.
  • “One of the reasons I co-founded Decrypt was to try to figure out how to use Web3 technologies to give more equity to content creators," said Bubinski.
Go deeper