Brand-owned media provides alternative to VC funding

Niche media companies have begun receiving direct investment from or been bought out by other brands as a platform for customer acquisition and marketing.

Why it matters: The alternative to venture capital funding for media startups doesn't necessarily hold them to aggressive growth goals VCs demand, but long-term commitment may lag.

State of play: These acquisitions or investments extend across topics from cars to business to sports.

• Galpin Motors, a Los Angeles-based car dealer, backed The Autopian, a new automotive news outlet launched by a pair of ex-G/O Media staffers.
• HubSpot, a sales and marketing software company, acquired The Hustle, a media brand that includes a daily newsletter about entrepreneurship and business news, in February 2021.
• Penn National, a casino operator, invested in Barstool Sports with $163 million for a 36% equity stake in January 2020. It plans to acquire the rest of Barstool in early 2023, according to Penn's latest earnings call.

Yes, and: Rather than go external, other brands have created their own media arms.

• Casper, the mattress startup, created Van Winkle in 2015 as a publication focused on sleep. It then created a print magazine called Woolly in 2017.
• Dollar Shave Club, the grooming startup, launched MEL as a men's lifestyle magazine in 2015.
• American Express relaunched its luxury lifestyle magazine Departures last year.

Yes, but: It's unclear how long the investments will last.

• Casper shut down Van Winkle in 2017, and the Woolly brand is no longer active, but Casper maintains a blog named The Casper Blog.
• Unilever, which acquired Dollar Shave Club in 2016, stopped backing MEL last March. Recurrent Ventures, a venture-equity-backed digital media company, acquired MEL in July 2021.