NewsCred, a company that licenses content from publications like The New York Times and The Economist for use in brand marketing campaigns, announced that it has raised $15 million in new funding.
The company was founded by Shafqat Islam, Iraj Islam, and Asif Rahman in 2008, and it has shifted focus a number of times, from a credibility rating score for publishers, to a “Ning for newspapers,” to a new kind of newswire and content licensing service. Licensing is actually still a big piece of the NewsCred business, but instead of selling that content to other publications, the company sells it to brands like Pepsi, Toyota, and Johnson & Johnson to use for marketing.
NewsCred says that it works with more than 2,500 news sources, using technology and an editorial team to choose the right articles, images, and videos for each brand, then distributing them via the web, email, and social networks. For example, NewsCred helped power the Pepsi Now campaign, in which the Pepsi website was taken over by a pop culture-centric news board. NewsCred says that one month after the campaign launched, traffic to Pepsi.com increased 2.4x.
CEO Shafqat Islam told me that NewsCred’s content marketing business has exploded in the past year.
“At the beginning of 2012, there were zero brand customers who were buying content from us,” he said. “And if you fast forward to now, 60 percent of our customers are big Fortune 500 corporate or consumer brands.”
Revenue has gone up 11-fold in the past year, and there has been a 540 percent increase in customers, NewsCred says. (It also acquired a publishing startup called Daylife.) So from a business perspective, the strategy seems to be working.
As for the implications on the editorial side, there’s been plenty of discussion (sparked recently by a controversial piece of sponsored content in the Atlantic from the Church of Scientology) about how the lines between online advertising and content can start to blur. Islam acknowledged that this is a big concern for its publishing partners — for example, he said that signing The Times was “a feather in our cap”, but in order to make the deal work, there were a number of limitations on what content NewsCred could use and where it could use it.
Overall, Islam said that NewsCred operates in “less of a gray area” because it’s not pushing marketing campaigns or advertorials onto its publisher sites, nor is it paying those publishers to create specific content for advertisers. Instead, it’s taking content that was being created anyway and making it available to brands.
NewsCred had previously raised $5 million from investors including FirstMark Capital, IA Ventures, Floodgate Fund, Lerer Ventures, and AOL Ventures. (AOL owns TechCrunch.) The new round was led by Mayfield Fund, with participation from Greycroft Partners, FirstMark, and IA Ventures.
Mayfield’s Rajeev Batra is joining the NewsCred board of directors. Batra said that he looked at 25 or 30 companies in the content marketing business before deciding to invest in NewsCred, which he said he “almost” thinks of as “Google for high quality business content.”
“Content is the currency for establishing authentic relationships with … customers,” Batra said, adding that he was impressed by the NewsCred team because “they thought about content and the need for content and the role it plays in the market in a very, very comprehensive way.”
The next steps for the company include growing internationally and finding smaller publications to partner with. Islam said that today, the publications with the best reputation in NewsCred are big publishers like The Times And The Economist, “but tomorrow they might be the Andrew Sullivans of the world.”