BuzzFeed is smaller than it thought it was going to be but it thinks it’s big enough to sell shares to the public this fall.
Digital media used to be exciting — a story about flashy new upstarts and paradigms displacing the old guard. Then reality hit. The old guys stuck around, a lot of the newcomers got a lot quieter, and in some cases, they basically imploded. Now digital media is kind of boring. And that’s good. That, in a couple sentences, is the story of BuzzFeed, which is now set to go public — 15 years after founder Jonah Peretti started it as a side project to his day job at the Huffington Post, and about five years after the last digital media hype cycle peaked. Back in 2016, at its buzziest, BuzzFeed convinced investors it was worth at least $1.7 billion dollars. Now it thinks it is worth $1.2 billion, and will be worth $1.5 billion after it buys Complex, the digital media publisher/video company/events business, for $300 million as part of its move to go public. The company also plans to add $150 million in debt to its books to make the deal happen. “There was a period of exuberance and hype around digital media, and that hype cycle allowed a lot of capital to flow into the space,” Peretti said in an interview. “And then there was a period where there was a lot more skepticism, and a demand to build a real business. And now we’ve built a real business.” The business Peretti built is still modest compared to older media companies, and tiny compared to the Google-Facebook duopoly that controls digital advertising: Combined, BuzzFeed and Complex generated $421 million in revenue last year, which is a drop from the $425 million it made the year before.
