BuzzFeed’s plan to go public includes an acquisition with an eye towards a younger audience and a bid to open up other revenue streams and rely less on advertising.
The digital news service earlier Thursday confirmed its intention to go public through a merger with 890 Fifth Avenue Partners Inc. , a special-purpose acquisition company, or SPAC. The deal values Buzzfeed at $1.5 billion.
As part of the deal, BuzzFeed has agreed to buy Complex Networks, a joint venture between Hearst and Verizon Communications Inc. (NYS:VZ) that caters to an audience of millennials and Gen Zers.
“With today’s announcement, we’re taking the next step in BuzzFeed’s evolution,bringing capital and additional experience to our business,” BuzzFeed’s founder and Chief Executive Jonah Peretti said in a statement.
The new company will be called Buzzfeed Inc. and the shares will trade on an undisclosed public exchange under the symbol BZFD. The Wall Street Journal reported the company’s plan to go public on Wednesday.
Buzzfeed late last year bough t HuffPost from an unit of Verizon , and owns food video and recipes site Tasty and other lifestyle brands.
In a slideshow to investors, as linked by Tech Crunch , Buzzfeed said it planned to “rapidly” grow its higher-margin commerce revenue stream so it becomes about 31% of its total revenue within three years.
The Complex acquisition, meanwhile, expands the brand “into new audiences and verticals” and “cements opportunity as defining youth media platform,” Buzzfeed told investors.
It said it had 38 million unique visitors as of October, about 7 million more than competitor Vox Media, who each spent about 21.2 minutes per visit, also more than time spent on rivals. It said that Complex had 14 million monthly unique visitors.
Its revenue mix in 2019 included 41% coming from advertising, 11% from commerce, and 48% from content, BuzzFeed said. It projected a mix of 44% advertising, 31% commerce, and 25% content by 2024.
It expects sales to grow from $421 million in 2020 too $1.06 billion in 2024. The company projected its adjusted EBITDA to rise from $17 million in 2020 to $265 million by 2024. According to the presentation, BuzzFeed earned $4 million in 2020, contrasting with a loss of $29 million in 2019.
Hundreds of companies have taken the SPAC route to become public, most recently Embark Trucks Inc., a maker of self-driving technology for the trucking industry, which announced its plans on Wednesday.
Famous names to tap equity markets through a blank-check company also include sports betting company DraftKings Inc. (NAS:DKNG) and electric-car maker Fisker Inc. (NYS:FSR)