Cheddar, the 'CNBC for Millennials,' Raises $22 Million for International Expansion
March 19 2018 - 2:51PM
Dow Jones News
By Benjamin Mullin
Cheddar, the financial news streaming service aimed at
millennials, is preparing to expand internationally and launch a
channel on Snapchat Discover after securing a new investment
round.
Roughly two years after its launch as a self-described
"post-cable network," Cheddar has raised $22 million, according to
founder and Chief Executive Jon Steinberg.
The funding round, the company's fourth, was led by Raine
Ventures, an early-stage media-and-technology investment firm.
Other investors include Liberty Global, Goldman Sachs, Antenna
Group, 7 Global Capital, Dentsu Ventures, New York Stock Exchange
owner Jeffrey Sprecher and Kelly Loeffler, chief communications and
marketing officer of Intercontinental Exchange. Previously, Cheddar
raised $32 million in three rounds led by Lightspeed Venture
Partners and Raine Ventures.
The company is now valued at $160 million, up from $85 million
after the last fundraising round, Mr. Steinberg said.
Mr. Steinberg, the former president of BuzzFeed, has pitched
Cheddar as a disruptor of cable news networks aimed at millennials
who are cutting the cord and turning away from traditional news.
About 95 percent of the company's revenue comes from advertising,
Mr. Steinberg said, mostly native ad sponsorships from big-ticket
advertisers like Fidelity and E-Trade that start at $125,000 per
month.
The company has booked $18 million in revenue for 2018, Mr.
Steinberg said, mostly from advertisers who've signed six- to
12-month deals. The remaining revenue comes mostly from selling
shows to networks and platforms such as Fusion and Spotify. The
company finished 2017 with $11.3 million in revenue.
Mr. Steinberg said Cheddar is hoping to forge distribution
partnerships with new investors Liberty Global, a cable giant, and
Antenna Group, which owns television stations in Greece, Serbia,
Slovenia and Montenegro. He's optimistic that the investment from
Dentsu Ventures will give Cheddar an entrée to Japan.
Cheddar, which has about 130 employees, isn't planning to grow
its headcount drastically over the next year, Mr. Steinberg said.
By the end of 2019, he expects the company will have fewer than 200
employees, part of an effort to keep expenses to a minimum. In
December, Cheddar had operating expenses of $1.5 million and was
nearly profitable, Mr. Steinberg said. This year, he doesn't expect
costs to break more than $2 million monthly.
"It will certainly cost something to go international, but I
raised the money to get this great group of investors involved,"
Mr. Steinberg said. "To have Liberty and Antenna partner to take us
onto their systems. For now the cash is in the bank. We have more
than enough cash to invest in what we want, get profitable and
never raise again."
It hasn't been determined yet whether Liberty and Antenna would
distribute Cheddar on their linear TV systems or over the top, Mr.
Steinberg said.
Some of the money from the raise will go toward building a
second news network, called Cheddar Big News. The streaming network
will focus on general-interest happenings in the mode of local TV
news. The network, which will cost between $1 and $1.5 million to
launch, is scheduled to debut in April, Mr. Steinberg said.
The company is also planning to launch a channel on Snapchat
Discover in April focused on business and tech news.
Cheddar is moving away from a strategy, announced shortly after
its launch, to focus on subscriptions as a revenue stream, Mr.
Steinberg said. The company put up a paywall in May 2016 and
charged users $6.99 per month for access to its content but has
since shifted to a strategy of launching with over-the-top bundles
like Sling, Philo, X1 and Molotov, Mr. Steinberg said. The company
will allow its users to log into its apps and websites with their
credentials from those companies.
Although the media industry is facing serious challenges
including fierce competition for advertising by companies like
Facebook and Google, Raine Ventures decided to invest because of
Cheddar's potential to disrupt the existing pay-TV business model,
said Gordon Rubenstein, managing partner at Raine Ventures.
"We don't think of Cheddar as a traditional media company," said
Mr. Rubenstein, who sits on Cheddar's board. "This is a post-cable
network. And we think it's a next-generation, global news and
information platform that is thinking about the industry
differently than any company we've seen in this space."
(END) Dow Jones Newswires
March 19, 2018 15:36 ET (19:36 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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