BuzzFeed, the online social publishing powerhouse with 40 million readers started and headed by Jonah Peretti, today announced that it has raised another $19.3 million to continue building out its empire. The Series D round was led by new investor NEA with existing investors RRE, Hearst, SoftBank, and Lerer Ventures also participating, as well as new investors Michael and Kass Lazerow — the founders of a social empire of another sort, Buddy Media.
The funding takes the total raised by BuzzFeed to $46.3 million.
Some believe that we are entering a period in which the big social media companies out there — up to now focused on scale — are going to start to have to think about making money. CEO Peretti, who had also been one of the masterminds behind Huffington Post (now part of AOL, also owner of TechCrunch), says the funding will be used to accelerate building the “next great media company.”
“We have the senior management, board, and investors we need to build the next great media company: socially native, tech enabled, with massive scale. We are all focused on that big goal and raised this capital to move even faster,” he said in a statement.
While businesses like Tumblr have advanced the blogging model with a super-simple platform for people to publish and consume snackable pieces of content, BuzzFeed has adopted that model to a bigger journalistic effort: viral image galleries, lists and other kinds of charticles pull in traffic for the ad-based site, and that helps finance more serious, often excellent, long-form features and investigations.
It’s a balancing act, a little like this:
Another interesting Tumblr comparison: BuzzFeed eschews traditional display advertising. In its case, the way it gets around this is to work with brands who buy sponsorships of posts that align with their wider marketing campaigns.
Last year BuzzFeed acquired Kingfish Labs to help buy social ads on sites like Facebook to pull in initial readers to these sponsored posts who then share them with friends. That drives unpaid views to BuzzFeed’s sponsored posts, earning it a margin on top of its own ad spend. It doesn’t reveal what its current annual revenue is, but notes that revenues grew “more than threefold in 2012, exclusively from content-driven, social advertising.”
BuzzFeed says that one-third of all of its traffic already comes from mobile devices, but as I pointed out yesterday, mobile is also the perfect vehicle for short content bursts of the kind produced by sites like BuzzFeed. So it comes as no surprise that at least some of the new cash injection will be used to expand its mobile play even further. In what way, however, is not yet clear. “New initiatives,” it says, “will be announced later in the year.”
Other areas that will see investment: geographical expansion (including perhaps a move to more international coverage from this very New York-feeling entity?); video investment; and editorial team expansion. It currently employs 180 people, which includes 70 reporters and editors.
Full release below.
New York, January 3, 2013 – BuzzFeed, the web’s leading social publisher, announced today that it completed a Series D financing of $19.3 million led by NEA. Previous investors RRE, Hearst, SoftBank, and Lerer Ventures participated. Michael and Kass Lazerow, serial entrepreneurs and co-founders of Buddy Media, joined the round as new investors.
“We have the senior management, board, and investors we need to build the next great media company: socially native, tech enabled, with massive scale. We are all focused on that big goal and raised this capital to move even faster,” said Jonah Peretti, BuzzFeed Founder and CEO.
In December, the company passed 40 million unique monthly visitors (Google Analytics), with growth driven by social (Facebook, Twitter, Pinterest) and mobile (over one third of all BuzzFeed traffic). The company also grew revenue more than threefold in 2012, exclusively from content-driven, social advertising, and grew staff to 180 employees.
One year ago, Ben Smith joined the company as its first Editor-in-Chief and has launched ten content verticals and bureaus in Washington, D.C. and Los Angeles. Smith has built an acclaimed editorial team of 70 reporters and editors, and BuzzFeed’s coverage of the 2012 election made it “the defining media outlet of 2012” according to The New Republic.
Under the leadership of Ze Frank, BuzzFeed’s Executive Vice President of Video, the company expanded into original video in 2012 and is routinely producing multi-million view social video hits on YouTube including “True Facts About the Angler Fish,” “The Perfect Guide to Holiday Etiquette,” and “The Angriest Babies in the Whole World.”
“We are laser focused on building a media company from the ground up for a world where social is the dominant way people discover and engage with all forms of media. That means reimagining and reinventing editorial, advertising, and publishing technology,” said Jon Steinberg, BuzzFeed President and Chief Operating Officer.
“We couldn’t be more excited to build the defining media company for the social era with Jonah and the team,” said Patrick Kerins, who led the investment for NEA and sits on BuzzFeed’s board. “We think BuzzFeed will be one of the great media companies of the next decade.”
The company also recently hired Jeff Greenspan from Facebook and BBDO as its first Chief Creative Officer. Greenspan and his team work with top brands such as GE, Virgin Mobile USA, Campbell’s, Microsoft, Pepsi, and leading agencies, such as OMD, Digitas, MEC, The Media Kitchen (a MDC Partners agency), Mediastorm, and Horizon to create shareable branded content that is distributed and optimized across the social web using proprietary BuzzFeed technology. BuzzFeed also optimizes this content via Facebook Sponsored Stories and Promoted Tweets.
“The big shift to social has arrived and BuzzFeed is building the defining media company for the social age,” said Lazerow. “I’m very excited to invest and advise a company that is leading the industry forward with an innovative approach to both social content and social advertising.”
The company will use the capital to further mobile development, expand geographically, grow its editorial team, invest in video, and work on new initiatives that will be announced later in the year.
Additional reporting Josh Constine
Image via BuzzFeed