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Mic sale highlights the risks of VC-backed media

Dollar signs flowing from hand illustration
Illustration: Lazaro Gamio/Axios

The cheap sale of Mic is bringing a lot of press attention to VC-backed media companies, highlighting the risk that comes with raising lots of money to support ad-driven media business models.

The big picture: Digital media companies tend to sell for anywhere between 2.5x and 9x revenues from the previous year, or a little higher in terms of EBITDA. They are valued at what their growth expectations will be for revenue and profit over time. The goal is to bring in money at a percentage higher than what they raised, demonstrating a growth trajectory. But companies don't always bring in revenues in multiples higher than the money that they raise, which can lead to sales, layoffs and unhappy investors.

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Valuations

Vox Media (founded 2011)

  • Raised: $307.6 million (latest round, 2015)
  • Revenue: $185 million (est.)
  • Latest Valuation: $1 billion

Vice (founded 1994):

  • Raised: $1.4 billion (latest round, 2017)
  • Revenue: $700 million (est.)
  • Latest Valuation: $5.7 billion

Buzzfeed (founded 2006):

  • Raised: $496.3 million (latest round, 2016 )
  • Revenue: $255 million (est.)
  • Latest Valuation: $1.7 billion

Cheddar (founded 2016)

  • Raised: $54 million (latest round, 2018)
  • Revenue: $25 million
  • Latest Valuation: $160 million

The Athletic (founded 2015)

  • Raised: $67.7 million (latest round, 2018)
  • Latest Valuation: $200 million

Axios (founded 2016)

  • Raised: $30 million (latest round, 2018)
  • Revenue: $20 million
  • Latest Valuation: TBD

(SOLD) Mashable (founded 2005)

  • Raised: $46 million (latest round, 2016)
  • Sold: $50 million, 2017
  • Revenue at sale: $42 million (est.)
  • Peak Valuation: $250 million, 2016
  • Multiple: 1.3x

(SOLD) Mic (founded 2011)

  • Raised: $60 million (latest round 2018)
  • Sold: $5 million, 2018
  • Revenue at sale: $10 million (est.)
  • Peak Valuation: $100 million + (2017)
  • Multiple: - 12x

(SOLD) Business Insider (founded 2007)

  • Raised: $55.6 million (latest round, 2015)
  • Sold: $442 million, 2015
  • Multiple: 9x

(SOLD) The Huffington Post (founded 2011)

  • Raised: $37 million (latest round, 2010)
  • Sold: $315 million, 2011
  • Multiple: 10x
Venture capital
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