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Mic sale highlights the risks of VC-backed media

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.

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

Go deeper

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Stalemate over filibuster freezes Congress

Illustration: Sarah Grillo/Axios

Senate Majority Leader Chuck Schumer and Mitch McConnell's inability to quickly strike a deal on a power-sharing agreement in the new 50-50 Congress is slowing down everything from the confirmation of President Biden's nominees to Donald Trump's impeachment trial.

Why it matters: Whatever final stance Schumer takes on the stalemate, which largely comes down to Democrats wanting to use the legislative filibuster as leverage over Republicans, will be a signal of the level of hardball we should expect Democrats to play with Republicans in the new Senate.

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Biden opts for five-year extension of New START nuclear treaty with Russia

Putin at a military parade. Photo: Valya Egorshin/NurPhoto via Getty

President Biden will seek a five-year extension of the New START nuclear arms control pact with Russia before it expires on Feb. 5, senior officials told the Washington Post.

Why it matters: The 2010 treaty is the last remaining constraint on the arsenals of the world's two nuclear superpowers, limiting the number of deployed nuclear warheads and the bombers, missiles and submarines which can deliver them.

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Sara Fischer, author of Media Trends
Updated 2 hours ago - Technology

Facebook refers Trump ban to independent Oversight Board for review

Photo: Alex Edelman/AFP via Getty Images

Facebook's independent Oversight Board has accepted a referral from the platform to review its decision to indefinitely suspend former President Trump.

Why it matters: While Trump critics largely praised the company's decision to remove the then-president's account for potential incitement of violence, many world leaders and free speech advocates pushed back on the decision, arguing it sets a dangerous precedent for free speech moving forward.

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