Scoop: Local newsletter company 6AM City in talks to raise money
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Local newsletter company 6AM City is in talks with the broadcaster Tegna and other media companies about a strategic minority investment, sources told Axios.
Why it matters: The seven-year-old startup is looking for a partner to help it scale faster as it aims to become profitable next year.
Driving the news: The firm has talked to over a dozen companies, including legacy media outlets and various content companies, a source told Axios.
- None of the conversations right now involve a change of control at the company, but that could change.
- Different partners could make sense strategically, depending on their regional footprint or local expansion plans.
- 6AM City makes the vast majority of its revenue from local business advertising as opposed to advertising from big, national brands.
- It has started to expand into other revenue streams. The firm, for example, launched Six & Main, an online shopping platform for local businesses in 2022.
By the numbers: The Greenville, South Carolina-based company is projecting around $9 million in revenue this year, up from $6.3 million last year and $3.6 million in 2021, the company's chief operating officer and co-founder Ryan Heafy told Axios.
- The firm has raised a total of $11.5 million, which includes $2.5 million from friends and family, a $1.5 million seed round, a $5 million series A round and $2.5 million in debt.
- It currently has 120 employees. It completed a reorg at the end of 2022 that resulted in a small handful of layoffs.
Be smart: The company began with newsletters primarily in the Southeast region of the country, and has since expanded to 26 markets, with about 1.4 million newsletter subscribers across all of those markets, Heafy said.
- Part of its growth plan is to work with local business partners in markets where it's looking to expand to cover the cost of expanding to new cities.
- In Lakeland, Florida, for example, the local economic council sponsored 6AM City's launch.
- 6AM City's newsletters focus more on community updates and events rather than hard news and investigative reporting.
The big picture: Many companies are trying to crack the local ad market, mostly by focusing on bringing national advertisers access to local audiences at scale.
- Growing a grassroots ad business at the local level takes a lot more time and energy to build organically, but if 6AM City can pull it off, it would have a strategic advantage over firms focusing on sales at the national level.
