Friday Fundings: Blackstone Leads $300 Million Round for Recurrent Ventures
Recurrent Ventures Snags $300 Million
Media company Recurrent Ventures snagged $300 million in a round led by private equity giant Blackstone (BX), bringing its total funding up to $400 million.
The owner of 24 publishing brands such as Popular Science, Saveur, and Outdoor Life, Recurrent Ventures plans to use the capital infusion to fund acquisitions and build a more diversified portfolio of offerings. Company CEO Lance Johnson hopes to grow the business and have it positioned to either go public or merge with another company within three years.
Recurrent’s ambitions come at a time of diminished interest in advertising-supported digital publishing. Broadly stated, competition from behemoths Google (GOOGL) and Facebook (FB) make it hard for others to attain growth rates supportive of high valuations. From 2015-2016, NBCUniversal (CMCSA) invested $400 million in BuzzFeed (BZFD) only to see the valuation of the internet media company halved shortly after its IPO.
Recurrent argues its strategy is different because advertising will be only one factor contributing to its bottom line.
Blackstone Sees Potential
Recurrent predicts just half its future revenue will come from advertising, with another 30% coming from ecommerce and from affiliate income. Subscriptions, content licensing, and events are anticipated to make up the rest of the revenue stream.
Blackstone’s appetite for businesses in the sector is evidenced by its backing of Candle Media, which has led several large media-company acquisitions in the last two years, including $900 million for Hello Sunshine, and nearly $3 billion for Moonbug Entertainment, as well as an investment in Westbrook, Inc. Market observers will be watching to see how the media industry evolves in an increasingly digitally-oriented world.
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