They were two guys who met during college and, in 2004, started sending out--with the help of a single writer--an email newsletter for young men a lot like them.
Seven years later, Ben Lerer and Adam Rich's company, Thrillist Media Group, has 230 employees and is growing--fast. On Thursday, they spent a day knocking down walls to expand the company's 80,000-foot warehouse space in Brooklyn. They report $32 million in sales in 2011, and say they are on track to hit $60 million this year. And on Friday, they closed a $13 million round of funding--the company's first significant cash infusion--to create or buy more brands, and hire more people.
Lerer says he needs a drink, a nap, and a weekend. Now.
"It's a pain-in-the-butt process, raising money," Lerer says. He should know: He also, with his father, runs Lerer Ventures, a seed-stage venture capital firm based in New York City. "I feel like I have been a fraud previously. I now have a much more sophisticated view of how things work."
Perhaps that's because Thrillist hadn't relied (much) on outside capital before. Lerer and Rich bootstrapped what was first a city-listings newsletter into a highly-profitable media company, which has since branched into e-commerce (Thrillist bought JackThreads online shopping site for less than $10 million in cash and stock two years ago), and now publishes Thrillist Rewards, a weekly deals email. The three properties combined have 4 million subscribers, and grew 982% in the last three years.
This week a slate of investors infused the company with $13 million in series A funding, led by Oak Investment Partners. Lerer Ventures and Bob Pittman's Pilot Group--the only prior investor in Thrillist, with more than $2 million over the years--also joined the round. The deal values Thrillist at a figure greater than $150 million.
Why did a profitable, fast-growing company look for a substantial cash boost? After such a quick and successful segue from DailyCandy-for-Urban-Dudes to e-commerce powerhouse, it seems Lerer, who is CEO, and Rich, editor-in-chief, are eager to create more brands and sell more stuff to their hard-to-reach young, male audience.
Lerer told me the $13 million will go in the bank so Thrillist can create or buy new brands and hire more people: "When we have conviction of what direction to go in, we don't want to have to forego something."
When I spoke with Rich a month ago, he hinted that Thrillist is still relying on its foundation, the attention of millions of young men who subscribe to its email newsletters--which he calls "the list."
"I mean, the blush is off the rose of the Groupon-daily-deals model, right? But we have millions of people we serve every day," Rich said. "That's our biggest asset. The more we can go back to that, the better off we are."
So what new content categories or brands might Thrlliist acquire or launch? Sports or gadgets seem likely.
"We want to find other things to drop into place around [our subscriber] so he doesn't need to go wandering around the cold, dark Internet to find them," Rich told Inc.'s Andrew Maclean in a video interview with the duo this week.
Lerer added: "In the future, we'll own Thrillist and Jack Threads and some other stuff."
"Other lucky, lucky companies." Rich said.
Lerer didn't reach out far from the friends-and-family tree for this round of funding. Oak's Fred Harman, who will be joining Thrillist's board, made a great return on a bet on The Huffington Post--from a $25 million third-round investment--which Ben's father, Ken Lerer, co-founded. Together, the father-son team run Lerer Ventures, which is backing a yet-unnamed Web video news start-up that Harman also funded with $5 million.
The Pilot Group is known for its prolific investments in tech-media companies, including lots of newsletters like DailyCandy. It's run by former AOL president Robert Pittman, currently CEO of Clear Channel Media Holdings. Ken Lerer was Pittman's right-hand man back at AOL--and they're still close. They bought a $20 million chunk of the New York Mets together.
"I'm a lucky boy," Lerer said. "If you look at the biggest media exits over the past few years, between Fred and Bob [Pittman], these are the guys behind those businesses. We're set up to win."