Business Insider Raises $5 Million From Jeff Bezos, Institutional Venture Partners, and RRE Ventures
Business Insider has raised $5 million in funding led by Jeff Bezos, the founder of Amazon.com. Business Insider was co-founded by formet Internet analyst Henry Blodget. Bezos reads the website often and he is making the investment through Bezos Expeditions. This brings Business Insider’s total funding to $18.3 million. RRE Ventures and Institutional Venture Partners also participated in this round. Some of Business Insider’s earlier investors include Marc Andreessen and Ken Lerer, the co-founder of the Huffington Post.
“Jeff’s leadership, vision and philosophy at Amazon have been an inspiration to a whole generation of startups and entrepreneurs, including me,” stated Blodget in an interview with Bloomberg. “It is a privilege and pleasure to have him invest in the company.” Business Insider hit around $10 million in sales last year and reported a net loss of $3 million according to sources with Bloomberg. Business Insider has around 100 employees and is expected to hit around $15 million in revenues this year, but it may not hit profitability said sources with Bloomberg.
Blodget, 47, was barred from working on Wall Street after settling claims with the Securities and Exchange Commission in 2003. In 2002, Eliot Spitzer was the attorney general of New York and he accused Blodget of publishing “buy” and “sell” ratings on stocks to help win business from investment banks. BusinessInsider hits around 24 million monthly readers per month.
In December 1998, Amazon.com stock was trading at $240 per share and Wall Street was skeptical about the company. However Blodget set a one-year price target of $400 saying that “Amazon’s valuation is clearly more art than science.” Three weeks later, Amazon.com’s stock shot past the $400 mark. Clearly Bezos has been following Blodget for a while now.
Below is the full memo that Henry Blodget wrote about the investment:
I wanted to share the details of the financing we mentioned last night. (Apologies for not being able to share them then — closing these things is an administrative nightmare, and it took a few hours longer than we hoped).
I’m going to post about this shortly after 10 a.m. Please don’t say anything or tweet about it until after the post hits.
Basically, Jeff Bezos is making a significant investment in the company. Our existing investors are also chipping in some more. In total, we’re raising $5 million.
This capital will allow us to continue to invest aggressively in many areas of the business, including editorial, tech/product, sales and marketing, subscriptions, and events. As we mentioned last night, it will also allow us to expand our office.
Jeff’s investment grew out of a dinner he and I had about a year ago. We talked about the business, and he was excited about it. (He sees some parallels with Amazon). A few months later, he expressed an interest in investing. My reaction was basically “Hell, yeah!”
Jeff’s vision, leadership, and philosophy at Amazon have inspired a whole generation of startups and entrepreneurs, including me. Amazon has always focused on customers first, knowing that, if they do a great job at that, everything else will take care of itself. This obsession with customers and long-term focus are the reasons that Amazon has been so successful. And this philosophy is something that we very much want to emulate. (We have two sets of customers, obviously — readers and sponsors. And we’re obsessed with both).
Jeff’s interest, and Business Insider’s extraordinary success over the past year, are due to your efforts on behalf of our readers and our clients. We have improved and grown dramatically, and we were pretty good to begin with.
Our goal is simple: To become the best digital business publication on the planet. We’re making great progress toward that. And this investment will help us get there.
Thank you again for your incredible work over the past year. Here’s to an even better 2013.