Media Companies Are Hot Again. No, Seriously
The fastest growing private media company in the country never intended in its early years to be so editorial.
When I spoke with Philippe von Borries, one of the two CEOs of Refinery29, he explained that the site, which is today a lifestyle and fashion site for women, began in 2005 as a retail-curation site. He told me:
Our mission back then was to build a platform for the world's greatest independent brands and boutiques. We launched with this map that mirrored the floor plan of a mall, the mall of your dreams. You orient yourself by the stores in that mall. That's also where the name comes from, because it was also about refining and distilling things, and curating.
And there's almost always been a commerce component to R29.com--meaning a visitor could purchase items directly on the website. E-commerce hasn't ever amounted to much, however--last year, it contributed just 5 percent of the company's revenue.
But it turns out that editorial--well, the advertising that runs on editorial content--has been the fuel that drives growth. The site's traffic has grown to 11 million monthly uniques, and Refinery29's internal creative team designs immersive native advertising packages for brands. So content is exactly what the company is putting its back into. And it has new heft in doing so, due to a fresh infusion of $20 million in funding from Stripes Group.
Yes, that's right: Newspapers are dying; print advertising revenue has decreased by half over the past five years, magazines are growing frail, and plenty of the hottest media start-ups out there don't even attempt to make revenue. But Refinery29 is putting all its eggs in the edit basket. Co-CEO Justin Stefano says that, given the acceleration in marketing and advertising spending online, especially in the realm of video, the R29 management team feels bolstering edit is a safe strategy.
"It's taken a while for the industry to find its footing. But I think over the next few years there will be a renaissance in media production," he says. "The dollars are there again; for a few years it's just that the marketing dollars weren't there."
It's a good day to be saying that: Today news broke that Vox media, the owner of The Verge, SB Nation, and Polygon, is taking $40 million in outside investment. Today Reuters reported that Glenn Greenwald, the reporter who broke the Edward Snowden story, is taking a job at a new media company headed up by eBay founder Pierre Omidyar. Perhaps Jeff Bezos wasn't crazy to buy the Washington Post.
Content companies are certainly having a moment. The gates for money--and the jobs--are both opening up.
Here's how Refinery29 is approaching this apparent new era of online media. While moving away from "native commerce," or the direct sales of products, on the Refinery29 site, the company is boosting what it calls "shopping." Only this form of shopping will simply be editorial coverage that brings readers to the brink of the point of sale before directing to the online retailer.
"We are focusing on getting them as close to checkout as we can before we hand them off to the retailer," Stefano says. "And we are building really cool tools around that."
Alas, a cool tool does not equal revenue. At least not yet. In this fashion, Refinery29, as an eight-year-old company with $30 million in outside funding, is starting to sound like a start-up again.
"We are still just figuring that out," says Stefano (who is pictured left). "We are still toying around with ways we can monetize that product database."
The latest infusion of funding triples the investment this fast-growing media company has taken. It's a big shift for the pair of founders, who told me a few months ago that when they launched in 2005, they had no idea how to raise money. They took a mere $160,000 from New York City-based retailer Steven Alan, and sustained the company on that for its first two and a half years.
Between 2010 and 2013, the company accepted a total of $10 million in three small rounds of funding from a diverse mix of investors, including individual investors, the Hearst Corporation, and larger firms, including Floodgate, First Round Capital, and Lerer Ventures.
The latest large round--called a Series C--comes solely from Stripes Group, a New York City-based private investment fund with a portfolio that includes Seamless, Elance, and Art.com.
"We didn't go out looking to raise a round," Stefano says. "Because of that we really took our time running the process--about six months. But we've known those guys since 2010; when we were doing our Series A we met with them."
Dan Marriott, a managing partner of Stripes Group, is joining Refinery29's board of directors.
"We have admired the Refinery29 team and story for more than a few years. When the opportunity to partner with the Refinery29 team presented itself, we couldn’t have been more excited,” Marriott said in a release. “Refinery29 is built for this generation--this is an authentic brand truly poised for greatness."
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.