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Exclusive: Sinclair, TelevisaUnivision back $50M media-for-equity fund

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Illustration: Tiffany Herring/Axios

TelevisaUnivision and Sinclair are backing a new $50 million "media-for-equity" fund from Mercurius Media Capital, the firm's founding partner Piyush Puri exclusively tells Axios.

Why it matters: The media-for-equity model has been gaining prevalence overseas but is seldom used in the U.S.

How it works: Media for equity, also known as media capital, offers startups advertising space in exchange for equity, rather than cash.

  • Sinclair and TelevisaUnivision have together committed around $50 million in media space, but no cash has exchanged hands. The media investment from the two is over a five-year period.
  • "The companies come to us and say, 'We want to spend this $1 million, let's say, in Sinclair broadcast.' We will then go back to Sinclair broadcast and say, 'Tell us what it is that you can do best within this $1 million for this company,'" Puri explains.

Zoom in: MMC is looking at companies past their Series A round that "have a functional product or functional service" and can handle a potentially large influx of customers.

  • They must be consumer-facing, since the model is based on advertising. Puri says they've looked at companies in the gaming, health care and lifestyle space.
  • "Our investment thesis is also dictated by who are the media partners that [they] currently have on board, because you want to make sure you're not making a forced fit of finding a really good startup but then trying to apply to a media company that really won't have the consumers for that," Puri says.

What's next: The fund is open-ended. MMC is talking to additional media partners and aims to secure more than $100 million in commitments by 2025.

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