Digital Media Outfit Buzzfeed will continue its plan to go public despite the SPAC route despite the poor response from investors
US digital company BuzzFeed, which has gained a considerable share of the mind in recent years with younger audiences for its videos and cute cat lists, will go public on Monday December 6 despite lack of investor enthusiasm .
BuzzFeed has chosen to go public through the SPAC (Special Purpose Acquisition Company) instead of the traditional conventional Initial Public Offering (IPO) method, as the former allows the listing process to take place. reduce up to 75%. The PSPC route also allows companies to share business model forecasts and future financial projections on finances that are generally prohibited in the traditional IPO process.
On Friday, December 3, BuzzFeed announced that it had completed a merger with 890 5th Avenue Partners, a special purpose acquisition company (SPAC), which would have raised $ 288 million earlier this year. In June of this year, 890 5th Avenue Partners announced its merger with Buzzfeed. However, the company only received $ 16 million from the PSPC deal as skeptical investors withdrew 94% of their funds.
Investors in a SPAC have the option of withdrawing their funds before that SPAC completes a merger. This protection is particularly valuable for those who invested in this SAVS before its merger objective was known.
Buzzfeed has, however, raised $ 150 million in debt financing as part of the deal. BuzzFeed has also agreed to buy Complex Networks, a joint venture between Hearst and Verizon that caters to Millennials and Gen Z audiences by delivering content on sports, clothing and fashion.
Buzzfeed is going public as it faces major internal dissent from its workforce over a wage settlement. Some of the company’s information service employees staged a 24-hour strike to protest the company failing to offer certain contract terms, including a base salary of $ 50,000, after nearly two years of negotiations.
Founded by Jonah Peretti in 2006, Buzzfeed initially focused on creating viral content centered around themes, videos, and chat lists. The media platform has attempted to expand its coverage by venturing into areas like political reporting, but with limited success.
In November 2020, Buzzfeed acquired the Huffington Post news site from Verizon, without disclosing the amount.
Buzzfeed has forecast its sales to exceed $ 1 billion in 2024. It has revenue of $ 421 million in 2020 and plans to close 2021 with revenue of $ 421 million.
According to Market watch, Buzzfeed’s revenue mix in 2019 included 41% from advertising, 11% from commerce and 48% from content, BuzzFeed said. He forecast a mix of 44% advertising, 31% commerce, and 25% content by 2024.