Evan Agostini/ AP
- Buzzy media darling TheSkimm is looking for an investor or buyer to accelerate its growth, people familiar with the talks told Business Insider.
- TheSkimm has raised $28.4 million and is on track to make $30 million in revenue this year, profitably, but its user growth has slowed, the sources said.
- The company wants to diversify its revenue with paid subscription apps, but media investment has dried up, and it's hard to get people to use new apps and pay for them.
- A company spokesperson denied theSkimm is "looking for a buyer" but wouldn't elaborate.
- Click here to read more BI Prime stories.
Buzzy media darling TheSkimm is looking for an investor or buyer as media companies consolidate around it, people familiar with the talks told Business Insider.
Founded in 2012 by two former NBC coworkers, Carly Zakin and Danielle Weisberg, theSkimm delivers a speed-read newsletter for millennial women on the news of the day. It bills itself as a membership company and has boasted of having celeb fans like Oprah and Reese Witherspoon.
TheSkimm is profitable and projects $30 million in revenue this year, most of it in the form of advertising, but its subscriber growth has slowed, two people with direct knowledge said.
The company met with investment bank LionTree, a source said. One of theSkimm's board members, Betsy Morgan, is also an executive in residence at LionTree, according to Linkedin. And the company has prepared a presentation touting its revenue and growth plans, according to people familiar with the matter.
A company spokesperson denied theSkimm is "looking for a buyer" but wouldn't comment further.
Some other venture capital-backed digital media companies have recently consolidated after hitting a growth wall. Refinery29 sold to Vice Media and PopSugar sold to Group Nine Media.
TheSkimm has raised $28.4 million from investors including 21st Century Fox and RRE Ventures - less than some of its peers but more than some other newsletter companies like The Hustle ($1.3 million, per Crunchbase) and bootstrapped Morning Brew.
TheSkimm most recently raised $12 million in 2018 from Google Ventures, and according to investors, reportedly was looking for a $100 million valuation at the time. It employs around 100 people.
TheSkimm has branched out to things like a podcast, video series, book, and e-commerce through links in the newsletter. In 2016, it launched a $2.99 a month paid app, Skimm Ahead, that adds relevant events to users' calendars.
TheSkimm wants to grow the subscription side of its business
But its daily newsletter subscriber growth, at around 7 million, has slowed - it's roughly even from a year ago - and the company needs more money to grow its user base and launch more paid apps as it tries to establish a bigger subscription business, people with knowledge of its plans said.
The company's growth troubles could be a function of the business it's in. Newsletter companies tend to hit a wall when they try to branch out to other products, people with expertise in that business model told Business Insider.
The newsletters that are most popular (as indicated by a high open rate) tend to be niche. As they get bigger, the open rate typically goes down, making them less attractive to advertisers. That's also the challenge facing 4-year-old Morning Brew, a similarly styled newsletter for young professionals, which itself is looking to branch out beyond advertising.
TheSkimm is also squarely aimed at young women, which limits its ability to grow its audience.
TheSkimm wants to build paid subscription apps. Finance may be one area of interest; theSkimm has been running a survey asking users questions like how they make financial decisions, how they get personal financial advice, and what topics and products they'd be interested in. But it's hard to get people to use, much less pay for, multiple apps.
Another challenge generally for media companies raising money these days is that investors have been reluctant to put more money into digital media where they don't see a path to diversified revenue streams.