The New York Times reports that fast-growing news aggregator and content site BuzzFeed closed a new $50 million investment from Andreessen Horowitz over the weekend. Andreessen Horowitz is a well-known tech venture capital firm based in Silicon Valley. The NYT’s sources says that AH’s $50 million investment values BuzzFeed at just over $850 million.
The buzz surrounding BuzzFeed
BuzzFeed has received a good deal of interest from venture capitalists because it is a growing web sensation that pulls in 150 million average viewers a month. Numbered lists (Top 5, Top 10, etc.) of trending topics are what the site is most famous for and what brings in much of its audience.
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But what has really set BuzzFeed apart, says co-founder and CEO Jonah Peretti, is the site’s in-depth understanding of technology. The firm now has 550 employees, and has enjoyed a great deal of success at distributing its viral content through mobile devices and social media sites like Facebook and Twitter.
In fact, the photo-sharing site Pinterest now brings in more traffic to BuzzFeed’s Life section than Twitter does, Peretti said in an interview with the NYT. The firm reports that social media represents almost 75% of BuzzFeed’s referral traffic today.
Chris Dixon, a general partner at Andreessen Horowitz, will join BuzzFeed’s board. Dixon said, “We think of BuzzFeed as more of a technology company. They embrace Internet culture. Everything is first optimized for mobile and social channels.”
In fact, BuzzFeed Creative is already the company’s largest revenue producer. The 75-person division is dedicated to creating custom video and list-style advertising content similar to its editorial content for other businesses. Peretti also said BuzzFeed’s revenue for the first half of 2014 was double the first half of 2013. Moreover, BuzzFeed is expected to bring in more than $100 milion in revenue by the end of 2014.
BuzzFeed looking to piggyback more growth
BuzzFeed announced on Monday, August 11th, that it planned to use the cash to make several major upgrades, including new content sections, creating an in-house incubator for new technology and plowing more resources toward BuzzFeed Motion Pictures, the company’s LA-based video arm. The firm will also consider acquisitions that dovetail well with its growth plans.