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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.

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
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