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Venture Investors’ $1.4 Billion Bet on News Faces a Reality Check

The strategy is to build a narrow audience of passionate followers and then go broad.
relates to Venture Investors’ $1.4 Billion Bet on News Faces a Reality Check
Illustration: George Wylesol for Bloomberg Businessweek

Spiffy online news outlets are hot again. Every month seems to welcome a new publication built on an established journalist’s existing audience. Recent years have brought Air Mail, Puck, Punchbowl News, Protocol, Grid, the Information, Tortoise, Axios, and the Athletic, not to forget Substack, where writers can sell subscriptions to their own newsletters. (Justin Smith, former chief executive officer of Bloomberg Media, just announced plans for such a media startup.)

Venture capitalists cumulatively pumped $1.4 billion into publishing startups in the U.S. and Europe last year, more than twice the investment of any previous year, according to research from Pitchbook Data Inc. The New York Times Co. recently agreed to buy sports website the Athletic for $550 million, and Axel Springer SE wrote a $1 billion check for Politico last year.