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BFD Expert Voices - Media Deals

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Triller, the controversial company that once tried to rival TikTok, is betting the upcoming merger with AGBA will revitalize its social media ambitions, CEO Bobby Sarnevesht tells Tim.

Why it matters: The plan comes amid the potential ban of TikTok by U.S. regulators — a move that will lead to a social media land grab by firms like Triller looking to cater to that massive audience.

Driving the news: Triller agreed to merge with AGBA Group, a Hong Kong-based financial services firm, last month in a deal that values the combined company at $4 billion.

Triller has eyed the public markets for years, first through a scuttled deal with SeaChange and then a direct listing on the NYSE, which it withdrew this week.

Both AGBA and the combined entity that will be formed after the deal closes will be chaired by former Barclays CEO Bob Diamond.

Zoom in: Sarnevesht said they chose the AGBA deal primarily because of Diamond's presence and the idea that a deal is quicker than an IPO.

"The TikTok timing stuff is pretty imperative," he tells Axios. "We really want to get out there, telling our story, and start rebuilding the app, which is one of our key products at Triller."

Sarnevesht, who took over as CEO in December, said that fixing problems with the music industry is a high priority, as is courting creators with small to mid-size followings.

"The one tactical error that Triller made was we focused too much on the top of the tail. Where TikTok was brilliant, and people don't give them credit for this, they focused on the long tail," he said. "The big guys came because they noticed the audience was there."

Catch up quick: Triller first launched in 2015 as a video editing app but later rebranded as a music-themed social media app, even announcing investments from top music artists including Snoop Dogg, The Weeknd and Kendrick Lamar.

But Triller struggled to make a meaningful dent in competing with TikTok. It was accused of not paying its creators and inflating its user metrics and sued over missed royalty payments by Universal Music Group and Sony.

It disclosed in January that it still owes more than $23 million in unpaid royalties.

Zoom out: In addition to its video app, Triller owns a SaaS business, an AI company, streaming platform FITE and Bare Knuckle Fighting Championship.

1 big thing: Rebuilding Triller 

a photo illustration of Triller CEO Bobby Sarnevesht surrounded by colorful circles 

Photo illustration: Tiffany Herring/Axios; Photo: Courtesy of Triller

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 Tim.

Why it's the BFD: 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.

2. The BFD: Trading ad space for equity 

an illustration of a remote control forming the middle of a dollar sign 

Gaming software startup Overwolf has acquired ad tech company NitroPay to grow ad revenue, CEO Uri Marchand tells Kerry.

Why it matters: The deal comes amid the growing popularity of games like Roblox and the ensuing rise of in-game advertising.

Zoom in: Overwolf's existing platform offers in-play ads across thousands of desktop apps that integrate with games like Minecraft and Fortnite. This deal adds a network of ad-supported websites that expands Overworld's audience from about 45 million monthly gamers to more than 100 million, Marchand says.

NitroPay works with more than 500 websites, including gaming sites, by offering display ads, ads in a customizable video player and ad-free viewing through subscriptions.

Marchand says he has known NitroPay co-founder Cody Bye for more than a decade. Overwolf started working with NitroPay about a year ago and later pursued an acquisition.

Founded in 2016, Missouri-based NitroPay did not raise capital. It has seven employees, including the three co-founders. All are joining Overwolf, which now has 171 employees.

Marchand declined to share the exact deal size but said it was a mix of cash and stock and included earnouts.

What's next: NitroPay will rebrand to Nitro. Marchand says he is committed to speed, paying publishers within seven days, ensuring fast ad loads and providing customer support within 24 hours.

Marchand plans to grow Nitro in part by introducing direct ad sales. Nitro's revenue, which totaled $20 million in 2023, had come purely from programmatic ads.

Overwolf is not planning to raise capital soon. Marchand says he is interested in other acquisitions for tools that support the current business, suggesting a generative AI tool for building mods or another ad network.

Marchand says his priority has been growing its payments to in-game creators, which was $201 million in 2023. The goal is $250 million in 2024.

3. Gaming startup buys ad tech

Illustration of a floating Mario-style block with a dollar sign on it.

Go deeper in our full database in the Axios Pro Deals Tracker.

• AppDirect, a B2B commerce platform valued by VCs at $1.7b, acquired Builtfirst, a provider of self-service marketplace platform technology that had raised around $4m from 500 Global, Side Door Ventures and Stage 2 Capital. appdirect.com

• Iconic Arts, a new "transmedia" studio based in Los Angeles and Tokyo, raised $3.1m from a group including screenwriter Eric Roth, Will.i.am and former Disney, Sony Pictures and JP Morgan executives. axios.link/44F8wdS

• Blockworks, a media company that covers cryptocurrency for professionals, acquired The Breakdown, a podcast network, Sara Fischer reports. axios.link/3wuGo0f

• Silver Lake, a tech-focused private equity firm, raised $20.5b for its seventh flagship fund. axios.link/4ariBfP

4. Deal flow

• Pele Cortizo-Burgess was named global CSO of Stagwell's Assembly. He was previously chief culture and inclusion officer at Initiative.  axios.link/4bvTfOL

• Jim Langston joined Paul, Weiss, Rifkind, Wharton & Garrison as a partner in its M&A practice in the corporate department, based in New York. He was previously a partner at Cleary Gottlieb. axios.link/3QAkobe

• Marissa Mayer, founder and CEO of Sunshine, Niraj Shah, CEO and co-founder of Wayfair, and Robert Hohman, co-founder and chairman of Glassdoor, were appointed to the board of Nextdoor. axios.link/4buXUR4

• Isabelle Pain, former content and strategy lead at Netflix France, was named head of global acquisitions and analytics at Studiocanal. axios.link/4a8e7dD

• Dale Earnhardt Jr. will join both TNT and Amazon's NASCAR coverage starting in 2025. axios.link/3UAj1ua

• Candace Parker, who recently retired from the WNBA, was named president of women's basketball for Adidas. axios.link/4dt5DRl

• Ricky Strauss is leaving Apple TV+ after 16 months as head of marketing. axios.link/3UyvT3T

• Aparna Purohit left as Amazon Prime Video's head of originals for India and Southeast Asia. axios.link/3URIWyI

5. Movin' on up (or out)

💄 Exclusive: Refinery29 will take over Beautycon (Axios)

"It's part of a broader plan to refocus Refinery29's business away from programmatic advertising and toward more products that can be monetized directly, such as events and branded services," Sara writes.

📈 Reddit shares soar 14% after company reports revenue pop in debut earnings report (CNBC)

"Revenue climbed 48% from $163.7 million a year earlier. The company reported $222.7 million in ad revenue for the period, up 39% year over year, which is a faster rate of growth than at its top competitors," Ashley Capoot writes.

🏈 NFL poised to allow teams to sell 30% of franchise to private equity (Bloomberg)

"Proposals under discussion would let buyout firms individually acquire as much as 10% of a team, according to people familiar with the matter, who asked not to be identified because the deliberations are confidential," Randall Williams and Gillian Tan write.

6. Channel surfing

an illustration of a hula dancer figurine on top of a vintage television set

@tim_bays: Pacers vs. Knicks on TNT. Reggie Miller is calling the game, so I may watch this one on mute. 

@kerrymflynn: "Radical Optimism" by Dua Lipa. This album on repeat. Tour when?!

✏️ Thanks to Michael Flaherty for editing and Katie Lewis for copy editing this newsletter.

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May 08, 2024

1 big thing: Rebuilding Triller