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; it was more of a partnership, where they would collaborate on projects, and extend BuzzFeed’s reach into TV and film.
Apparently it went well, as the company is getting ready to put even more money into BuzzFeed, according to a report from ReCode. It is said to be finalizing a deal to put roughly another $200 million into the company, at a valuation of around $1.7 billion.
If this deal goes through, it would give BuzzFeed a total of $496 million raised. Previous investors have included Andreessen Horowitz, NEA, Lerer Ventures, Hearst Media, Softbank and RRE Ventures.
One thing this new deal would not so is have a significant effect on its valuation. The last time BuzzFeed raised money it was valued at $1.5 billion, so it would barely move the needle there.
Part of the reason for that is, as ReCode notes, BuzzFeed was forced to reportedly cut its 2016 revenue goals in half, from $500 million to $250 million, last year.
Lerer says the company’s board hasn’t changed its forecast for this year. He says the company met its projections for the first quarter of this year and is on pace to exceed its projections in Q2 and the rest of the 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.
Video is also the area most likely to appeal to NBCUniversal. It’s not putting $400 million into the company for nothing; it is expected BuzzFeed to help it reach a younger, hiper audience, who will react to its viral content.
New York City-based BuzzFeed was founded by CEO Jonah Peretti. Last year, the site revealed that it was reaching over 200 million monthly unique visitors and seeing 1.5 billion video views every month.
VatorNews has reached out to BuzzFeed and NBCUniversal for confirmation of this new round. We will update this story if we learn more.
(Image source: money.cnn.com)
