BuzzFeed has agreed to go public in an agreement with a white-collar control company that said the group had an implicit valuation of $ 1.5 billion, as digital media companies rush to raise funds to better compete with giants. technologies like Google and Facebook.
The 14-year-old company will be founded with 890 Fifth Avenue Partners, a special-purpose acquisition company that raised $ 288 million earlier this year.
BuzzFeed has also agreed to buy Complex Networks, a digital publisher focused on streetwear and pop culture, from Verizon and Hearst for $ 200m in cash and $ 100m in capital.
Instead of private investment in public equity financing that has become the norm for the Spac business, BuzzFeed has raised an additional $ 150 million through convertible bonds led by Redwood Capital Management.
BuzzFeed, known for its articles and quizzes, was one of a generation of digital media groups to attract billions of dollars to high ratings, as they were heralded as the future of the media.
However, these companies have struggled to live up to expectations, leading to reduced valuations and consolidation across the sector. BuzzFeed was previously valued at $ 1.7bn in a 2016 fundraising round.
Jonah Peretti, who first co-founded the Huffington Post, started the BuzzFeed website in 2006 using popular content from all over the internet. The company in 2011 hired journalist Ben Smith to build a serious journalism operation and the group was recently awarded its first Pulitzer Prize for international information.
Digital media companies have been looking for ways to band together in recent years just like them he struggled to survive in a rapidly evolving medium landscape.
BuzzFeed could use its public listing as a vehicle to do more business, according to a person close to the company, who added that Peretti was eager to enrich as many digital companies as possible to increase the advertising scale.
The person added that it was highly unlikely that BuzzFeed would merge with Vice, as some analysts have speculated, given the difficulty of merging companies with very strong executives struggling to work together.
Peretti will continue to manage BuzzFeed as a public company. Adam Rothstein, executive chairman of Spac, and Greg Coleman, former chairman of BuzzFeed who is a director of Spac, will join the company’s board of directors.
In a note to staff Thursday, Peretti said, “We are finally scaling up to influence the functioning of the larger media industry and help shape a better model for the future,” adding that the company would do “more.” of half a billion [dollars]”In revenue this year.