Buzzfeed, the US-based digital media company backed by broadcaster NBCUniversal, media group Hearst and telecommunications and internet group SoftBank, has agreed a reverse takeover at an implied valuation of about $1.5bn.
The company is joining forces with special purpose acquisition company 890 5th Avenue Partners, which floated on the Nasdaq Capital Market in a $250m initial public offering in January this year.
Alternative investment manager Redwood Capital Management is leading a $150m convertible note financing supporting the transaction, participating alongside CrossingBridge Advisors, Cohanzick Management and Silver Rock Financial.
Founded in 2006, Buzzfeed runs an online media platform which offers short-form content such as listicles and quizzes in addition to longer original pieces. It also owns social food network Tasty and the political and opinion-piece focused HuffPost, and claims it became profitable in 2020.
The deal was announced in tandem with Buzzfeed’s acquisition of Complex Networks, the operator of a youth entertainment network, for an undisclosed amount.
The company had raised some $500m in funding, most recently securing $200m from NBCUniversal in 2016 at a $1.7bn post-money valuation. The same investor had provided $200m the previous year in a deal valuing it at $1.5bn post-money.
Venture capital firm Andreessen Horowitz had invested $50m in Buzzfeed in 2014, the year after New Enterprise Associates (NEA) led a $19.3m series D round featuring Hearst subsidiary Hearst Interactive, SoftBank unit SoftBank Capital, RRE Ventures and Lerer Ventures (now Lerer Hippeau).
Buzzfeed had raised $15.5m in series C funding from the same investors in 2012, having received $8m in a 2010 series B round co-led by SoftBank Capital and RRE Ventures and backed by Hearst, SV Angel and Founder Collective. It came after Hearst and SoftBank co-led the company’s $3.5m series A round in 2008.
Jonah Peretti, founder and chief executive of BuzzFeed, said: “BuzzFeed is now the undeniable leader for the next generation of media. We’ve built a slate of essential brands, loved by the most diverse, engaged and loyal audience on the internet.
“With today’s announcement, we are taking the next step in BuzzFeed’s evolution, bringing capital and additional experience to our business. I am thrilled to have [890 chairman Adam Rothstein] join our team as we work towards becoming the world’s preeminent digital media company.”
