Buzzfeed expects to become a $1bn-revenue business within three years, newly-published investor documents show.
The projection was made as the digital media group announced plans to enter the US public market through a merger with 890 5th Avenue Partners, a special purpose acquisition company (SPAC). The deal is expected to value Buzzfeed at $1.5bn.
As part of the deal, Buzzfeed – which currently operates Buzzfeed, Buzzfeed News, HuffPost, Tasty and several smaller media brands – has agreed to acquire digital lifestyle publisher Complex Networks.
In a slideshow presented to investors, Buzzfeed revealed that its business generated revenues of $321m last year, while Complex made $100m.
This year, Buzzfeed believes the combined group will have a turnover of $521m (including $119m from Complex). It expects group revenues to reach $654m next year, $833m in 2023 and $1.1bn in 2024.
The slideshow also showed that Buzzfeed – which has been loss-making for much of its 15-year history – turned a profit in 2020 and expects to strengthen its bottom line in the coming years.
Last year Buzzfeed’s earnings before interest, tax, depreciation and amortisation (EBITDA) hit $31m, or $17m when including a $14m loss incurred by Complex. In 2019, Buzzfeed said that, on a pro forma basis (i.e. with Complex included), it made a $14m loss. Buzzfeed management projects a profit of $263m in 2024.
Announcing his company’s plans to go public on Thursday, Buzzfeed’s founder and CEO Jonah Peretti said: “Buzzfeed is now the undeniable leader for the next generation of media. We’ve built a slate of essential brands, loved by the most diverse, engaged, and loyal audience on the internet.
“With today’s announcement, we’re taking the next step in Buzzfeed’s evolution, bringing capital and additional experience to our business.”
Peretti launched Buzzfeed in New York in November 2006. The business grew rapidly in the early 2010s as it expanded its operations across the world.
In 2015 and 2016, investments from NBC Universal valued the company at $1.7bn.
Buzzfeed, along with other digital media companies like HuffPost and Vice, began to struggle financially in the second half of the last decade and made numerous rounds of cuts in the pursuit of profitability.
Last year, amid the Covid-19 pandemic, Buzzfeed closed its dedicated news operations in the UK and Australia. Buzzfeed completed a deal to buy HuffPost earlier this year and axed dozens of jobs across the US, UK, Canada and Australia.