The Athletic has raised $40 million in a series C funding round and is valued at around $200 million, Axios reported this morning. This brings the subscription-based website’s fundraising total to $70 million since its formation in 2016. In layman’s terms, that’s a lot of money.
The latest round is being led by Founders Fund, the venture capitalist outfit. This is an interesting nugget when one considers the fact one of the firm’s founders, Peter Thiel, annihilated Gawker around the time The Athletic was founded. Sources tell Axios that Thiel is not directly involved in the deal.
Dramatic new financing changes some of the calculus surrounding the company’s long-term viability, which has been one of the biggest stories in sports media. This is simplifying it a bit, but the common refrain from those in the industry seems to be “we’re rooting for it and success will mean good things for journalism in the future, but we don’t know how they’ll continue to pay for all the top-end talent.”
The Athletic has added 35 more markets to its coverage map this year. Co-founder Alex Mather told Axios that the new injection of fund will “used to invest in audience, data and editorial teams that drive subscriptions.”
While splashy new hires have doubled as helpful advertising in the building stage, it will be interesting to see what The Athletic will do to both continue its 90 percent renewal rate and gain news subscribers. The tweaking and adapting phase will run concurrent with the building, and there’s plenty of resources in the bank to try bold things in both departments.
As we wrote before, The Athletic will really have to ramp up its subscriber from the publicly noted “over 100K” to sustain for the long run. Raising $40 million when they raised $20 million less than a year ago is both a show of strength that investors have faith that it could be a unicorn, but also from the outside could be read potentially as a concerning indication that they are burning through cash. Media members are rooting for them to succeed because they have a lot of content that can’t be read anywhere else and, from a compensation perspective, they’re a tide that’s lifted all boats in this industry, but their ultimate success is not yet a foregone conclusion.