Buzzfeed gets fed another $50m

US news and entertainment website Buzzfeed has received a $50m cash injection from venture capital group Andreessen Horowitz, whose impressive online investment track record includes Facebook, Twitter, Skype and Airbnb.

The latest fundraising more than doubles the money Buzzfeed has raised to date. Set up in 2006 and famous for its ‘listicles’ (with titles such as ‘40 Things That Will Make You Feel Old’), animated pictures and videos, it now plans to beef up its video unit, offer more content, and open outposts around the world.

What the commentators said

Buzzfeed, set up by serial entrepreneur Jonah Peretti, plans to emerge from its revamp as “the world’s pre-eminent media company”. It is certainly being valued as a potential winner: Andreessen Horowitz now owns 6% of the equity, which implies an overall valuation of $850m. That’s three times as much as The Washington Post, as Rupert Neate pointed out in The Guardian.

So is it worth it? Buzzfeed gets 150 million visits a month, compared to the New York Times’s 53.8 million, said Queena Kim on Marketplace.org. What’s more, most of Buzzfeed’s audience is under 35, “a demographic that’s catnip to advertisers”.

What it’s really good at, said Felix Salmon on medium.com, “is placing its finger on the pulse of what people like to consume on the internet right now – and creating the products they’re going to love to consume on the internet tomorrow”.

Much of its traffic now stems from social media sites. The trick will be to reach more of this audience with new editorial products and sell advertisers its expertise in doing so. In a sense, it will be creating, rather than just running, a web-based advertising campaign.

So it should be compared to advertising agencies, not newspapers. “Looked at that way… it’s downright cheap,” said Salmon.

Merryn

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