Exclusive: 6AM City raises series A led by Tegna
Local newsletter company 6AM City has raised more than $10 million in series A funding round led by local broadcaster Tegna, Axios has learned.
Why it matters: Amid a grim publishing landscape, few dollars are being invested in local media startups outside of philanthropy.
- The Tegna deal underscores how traditional local media companies might partner with startups to achieve mutually beneficial growth goals.
- The company publishes newsletters across 26 markets, mostly across the Southeast region of the U.S., but is starting to expand to more markets outside of that region.
- As of February, it has roughly 1.4 million free email subscribers across its various suite of newsletters.
Details: The new funds will help 6AM scale its business, while hopefully achieving profitability in 2024, said co-founder and chief operating officer Ryan Heafy. f
- The Greenville, South Carolina-based company will maintain majority control, as it has since it was founded in 2016.
- The round included participation from American Investment Holdings, a family office based in Tampa, VentureSouth, an early-stage venture firm that provides capital to startups in the Southeast and Harbright Ventures, a Raleigh-Durham based private equity firm.
- All three firms, in addition to other angel investors in the communities the company serves, have reinvested materially over the past seven years to fuel the sustainable growth of 6AM City, per Heafy.
- Financial terms of the deal, including valuation, weren't disclosed.
How it works: As part of Tegna's investment, 6AM will include news and weather from Tegna's local broadcast stations in its daily newsletters in overlapping markets, the company said in a statement.
- It will also promote Tegna's morning newscasts in those emails, and will integrate local sports headlines from Tegna's local sports network "Locked On," into its coverage.
- In return, Tegna will distribute 6AM City content on its website, podcasts and over the top TV channels.
- The two firms will also work together to co-launch newsletters in two additional markets this year.
By the numbers: 6AM City, which has around 120 employees, closed 2023 with nearly $8 million in revenue, per Heafy.
- It was initially projecting around $9 million, up from $6.3 million in 2022 and $3.6 million in 2021.
- Prior to the series A round, the firm had raised a total of $11.5 million, which includes $2.5 million from friends and family, an initial $1.5 million seed round and another $7.5 million in a combination of convertible and promissory notes.
The big picture: 6AM City's content focuses on economic development in the communities it serves, not necessarily original reporting and investigations.
- The Tegna deal will bring more news content, including sports and weather, to 6AM City's readers.
- The company in the past has partnered with economic development organizations, sports teams and large employers in various communities to help launch newsletters in local markets.
What's next: 6AM City is expanding its newsletter coverage to Charlotte, North Carolina in partnership with Tegna.
- With Charlotte, 6AM City and Tegna will have overlap in 12 cities across the U.S.
- The two firms plan to co-launch in one more market later this year. 6AM City plans to add three new cities to its newsletter portfolio in 2024.