Funding

Fintech and Finance Firms Snap Up Media Companies to Gain Audience

by Fintechnews Switzerland August 4, 2022

This past year has seen banks, financial services companies and fintech startups snapping up media companies, realizing the merits of owning their audience to gain exposure, sell more products and become more profitable.

An extensive research paper by business analytics and market intelligence company CB Insights looks at finance companies’ possible motives and ambitions in acquiring media companies, delving into the recent deals that occurred.

The report highlights that while there is a number of reasons for purchasing media and community, perhaps the biggest benefit is that it drives the cost of acquiring a new client to much lower levels. The reason for that is quite obvious: these platforms already have an audience and traffic, allowing brands to get access to a large pool of prospects pretty much overnight.

For these firms, the ambitions are clear: being able to run more contextually relevant and impactful marketing campaigns, increasing customer engagement and affinity, becoming the go-to brand for specific topics, and, ultimately, becoming more profitable.

Finance firms acquiring media companies

In the finance industry, the trend has certainly been observed this past year with a number of high-profile acquisitions recorded.

In Q3/Q4 2021, JPMorgan, the world’s largest financial services institution, purchased two content/media assets: The Infatuation, a popular restaurant discovery platform designed to provide honest recommendations for where to eat.

Food and dining is a key spend category for card companies, and with its 1.5 million to 2 million monthly visitors, The Infatuation’s audience will not only help JPMorgan cheaply attract new cardholders but also provide perks and benefits to existing cardholders, increasing thus engagement and affinity, the CB Insights report says.

Besides traditional banks, new-age finance companies and fintechs too are aggressively pursuing acquisitions of media platforms.

Most recently, Pipe, a US trading platform for recurring revenues, acquired Purely Capital, a media and entertainment financing company. Pipe said in a statement that the deal was meant to help Pipe expand into other sectors, furthering its mission to becoming the trading platform for any company with recurring revenues, regardless of industry.

Similarly, mobile banking platform MoneyLion announced in November 2021 that it had purchased Malka Media Group, a fast growing digital media and content platform across entertainment, sports, gaming, live streaming, and brand storytelling.

MoneyLion said the deal will not only allow it to accelerate its ability to engage with consumers across all digital and emerging channels, but also connect directly with communities natively inside and outside of its platform.

At around the same period, Scalable Capital, a German neobroker, unveiled the purchase of JustETF, a special interest portal for exchange-traded index funds (ETFs) and investing. Scalable Capital said the acquisition will complement its existing information resources and support its path towards becoming Europe’s leading digital investment platform.

With a presence in Germany, Italy, and other European markets, JustETF claims to be one of the largest information portals on ETFs on the continent, recording around eight million hits per month.

In the same category goes that end of 2019 Swiss unicorn Avaloq took over full control over Derivatives Partners including the Derivatives online and offline magazine payoff.ch.

In the US, Prove, a phone-based authentication services provider, bought fintech advisory and insights platform Medici Global (including their online news site GoMedici.com) in March 2021 to expand its sales and business development activities and bolster its marketing capabilities. Founded in 2013, Medici Global claims it has built the industry’s first insights and advisory platform dedicated to fintech.

Asian finance firms flock to media companies

In Asia, AMTD Digital, the digital solutions platform owned by Hong Kong’s AMTD Group, has been actively working on expanding its presence in the media space. In August 2021, the firm finalized its purchase of DigFin, a local online journalism brand and fintech content agency launched in 2017 by financial journalist and author James DiBiasio.

The deal came just months after the company’s strategic investment in Hong Kong-based digital media platform Forkast, and its partnership with publishing and data firm 36Kr.

Founded in 2017, Forkast is a media site that covers all things blockchain and emerging technology at the intersection of business, economy, and finance. In May 2021, it closed an oversubscribed US$1.7 million seed round 2021 that included the participation of Fenbushi Capital, Alibaba Hong Kong Entrepreneurs Fund, Animoca Brands, Longling Capital, CMCC Global and Sora Ventures.

AMTD Digital is far from being the only fintech player in Asia to have set its sights on fast-growing media companies and communities.

Just three months ago, Binance, one of the world’s largest cryptocurrency and blockchain infrastructure providers, committed a whopping US$200 million investment in business magazine and digital media platform Forbes. Previously Binance took over the popular crypto data page CoinmarketCap for an estimated US$400 million.

The Forbes deal followed Vietceta’s US$2.7 million pre-Series A in August 2021 that saw the participation of investors such as Go-Ventures, Gojek’s corporate venture arm; Z Venture Capital, the corporate venture arm of Z Holdings, which is owned by SoftBank Group and Naver Corporation; East Ventures; Summit Media; Genesia Ventures; as well as Hustle Fund.

Created in 2016, Vietcetera targets Millennials and Gen Z audiences and claims an audience of 20 million users per month. The company has plans to to launch new vertical brands in 2022 focused on women’s content, real estate and personal finance.

In Hong Kong, HashKey Capital, the corporate venture capital (CVC) fund of HashKey Digital Asset Group, participated earlier this month in a US$10 million funding round going towards Decrypt, a media company focused on the cryptocurrency industry and the decentralized web, and its production arm Decrypt Studios, a Web3 studio specializing in metaverse activations.

Decrypt said it will use the proceeds to invest in further editorial growth and live video efforts at Decrypt Media, as well as continue building out Decrypt Studios, which has so far enjoyed success with branded non-fungible tokens (NFTs) and metaverse-related projects for clients in the fashion, entertainment and real estate industries.

A spin-off of blockchain accelerator and incubator ConsenSys Mesh, Decrypt claims it has grown to 5 million average monthly unique visitors since its inception back in 2018.

Besides HashKey Capital, other investors that participated in the round included Hack.VC, Canvas Ventures, Protocol Labs and SK Group.

Other noteworthy developments

To wrap up our review of the most notable media acquisition deals and funding rounds closed this past year, we’ve compiled a non-exhaustive list of other noteworthy news in the domain:

Already in 2012 Middle East News page Zawya was acquired for a rumored 40m USD by Reuters
In 2019 London listed FUTR acquired Smartbrief for an estimated 45-65m USD
In Oct 2020 Axel Springer bought Morning Brew for 75m USD in an all Cash Deal.
In June 2021 Lloyds Capital invested GBP13 million into Hybrid Media (Techwireasia)
Cryptocurrency exchange Coinbase rolled out a new Fact Check blog to hit back against negative press coverage and “misinformation”;
Quartz, a business news organization, is being acquired by media group G/O Media;
TechNode Global, a pan-Asian tech media and community platform startup, closed a US$1 million seed round led by Kairous Capital, with the participation of Nutty Capital and SPH Ventures, the corporate venture arm of Singapore Press Holdings;
Robinhood acquired MarketSnacks, a media company that aimed to make financial news digestible and has since been rebranded as Robinhood Snacks
Cain Communications, a media company, has acquired Green Market Report, a digital media brand that covers financial news of the rapidly growing cannabis industry;
German publisher Axel Springer completed its US$1 billion acquisition of Politico, one of the world’s most influential sources for political news; and
Blackstone, an American alternative investment company, bought media and data company International Data Group (IDG) for an enterprise value of US$1.3 billion
(July Update):Grvty Media (owner of Vulcanpost) acquired by Singapore based Towerhill by Kiat Lim
(July Update) Informa PLC bought Industry Dive Media in July 2022 for 525m USD.