Last year, NBCUniversal made a couple of surprise investments, putting money into both Vox and BuzzFeed, giving them each $200 million. It was old media meeting new media. NBCUniversal didn't just invest in BuzzFeed, though; rather, it was more like a partnership, one where they would collaborate on projects and ad-sales.
Apparently they worked well together, as NBCUniversal has now put even more money into BuzzFeed, it was revealed on Monday.
This new round gives BuzzFeed a total of $496.3 million raised in venture funding. Previous investors have included Andreessen Horowitz, NEA, Lerer Ventures, Hearst Media, Softbank and RRE Ventures.
Once again, this isn't just NBCUniversal putting money into the company. This time, BuzzFeed says the money will be used to expand their "advertising sales relationship," meaning that BuzzFeed will work with NBCUniversal on production and social distribution for digital video content on NBCUniversal’s Content Studio, which it will then present to advertisers.
On the other side, NBCUniversal will help BuzzFeed by presenting its inventory to advertisers as well. The companies will also work together to "create new digital consumer experiences for NBCUniversal premium content."
Since the last investment, NBCUniversal and BuzzFeed partnered on initiatives that included the 2016 Rio Olympics on Snapchat, and content partnerships that included Tasty, BuzzFeed's food media network, on NBC News’ TODAY.
“Over the past year, BuzzFeed has proven to be a valuable partner across our business. From the Olympics to the record-breaking launch of Secret Life of Pets, BuzzFeed has helped us engage millennial audiences with our content and extend the reach of our clients’ campaigns to new platforms,” Maggie Suniewick, President of NBCUniversal Digital Enterprises, said in a statement,
“We are looking forward to using the power of our brands to collaborate in more innovative ways that drive value for both companies.”
BuzzFeed also plans to use the funding to develop its own technology, in order to grow Tasty, as well as to expand its journalism platform, and to grow digital video operations in New York, Los Angeles and other global markets.
This new investment valued BuzzFeed at $1.7 billion, which would mean it didn't have a significant effect on its valuation; the last time BuzzFeed raised money, which was that previous investment from NBCUniversal, it was valued at $1.5 billion.
Part of the reason for the small bump might be the fact that BuzzFeed was forced to reportedly cut its 2016 revenue goals in half, from $500 million to $250 million, last year.
The company is also coming off a reorganization, which it implimented over the summer, where it split itself into two separate divisions: BuzzFeed News and BuzzFeed Entertainment Group, a new group in a that would put a focus on digital video.
That is important for the future of the company. According to the New York Times, video already accounts for more than half of BuzzFeed’s total revenue, up from 15 percent at the end of 2014. In the next two years, it is expected that video will generate up to 75 percent of BuzzFeed's advertising revenue.
It's not a coincidence that part of this deal has to do with video, with BuzzFeed growing its own video platform, while also helping NBCUniversal with its online video content.
New York City-based BuzzFeed was founded by CEO Jonah Peretti. The company currently reaches over 500 million people.
LionTree Advisors acted as financial advisor and Fenwick & West LLP acted as legal advisor to BuzzFeed on the transaction. Davis Polk & Wardwell LLP acted as legal advisor to NBCUniversal on the transaction.
(Image source: fortune.com)