Late last month Vice Media confirmed it was selling a $250 million state to TV group A&E Networks, valuing the company at $2.5 billion. It’s now added a second $250 million investment, this time from Silicon Valley VC firm Technology Crossover Ventures (TCV). The New York Times reports that each of the two investments are for around a 10 per cent stake in the company, meaning the $500M total for these two recent investments equates to a fifth-sized stake in its business.
Vice Media started out making print magazines but has recently gained traction with edgy, even gung-ho, online video reports — including a recent series shot from within the self-styled ‘Islamic State’ in Iraq and Syria. That series has drawn some criticism from traditional media outlets that Vice is allowing its platform to being misappropriated as a propaganda channel by violent militants, offering uncritical reportage in exchange for sensational access.
In scenes from the series an IS press officer (yes, the militants have a press officer) is seen accompanying the Vice reporter, sanctioning the reporter’s access to occupied territories, while the reporter verbally refers to being inside “the world’s newest state” — a phrase that apparently normalizes the IS occupation (although lower thirds on the video badge the location as ‘Raqqa, Syria’). Vice has rebutted this criticism, arguing its audience is sophisticated enough to understand an implicit critique of the subjects being covered.
Vice CEO Shane Smith appeared at our Disrupt New York conference (pictured above) back in May, where he laid out his plan to build an online video company that’s 10 times bigger than CNN. The company self-describes as “an ever-expanding nebula of immersive investigative journalism, uncomfortable sociological examination, uncouth activities, making fun of people who should know better, and award-winning documentaries”. It’s targeting a youth demographic which it believes has an appetite to consume news, just not the established package crafted by traditional media companies.
Vice Media is not the only online media company to attract big investment in recent times. BuzzFeed, an expert purveyor of news packaged as (and with) other cutesy clickbait, raised $50 million from Andreessen Horowitz last month. The thread linking these two media investments is that both Vice and BuzzFeed are taking a non-traditional approach to presenting news online, and gaining traction with a younger demographic beloved of advertisers because of it.
According to the NYT, Vice intends to use the $500 million total funding it’s raised in the past few days to beef up technological capabilities and content production across the 36 countries where it operates, including the US.
More specifically, the TCV investment will be used to fund the creation of proprietary technologies for distributing media across the web, mobile and social, while the earlier A&E investment will fund content expansion, with Vice set to broaden its mix of global programming in categories including news, culture, sports and fashion.