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Dec 16, 2018 by

As legacy news companies suffered tremors over the past decade, money from venture capitalists poured into upstarts that promised to leverage a keener understanding of online reading habits to create a giant-killing class of new media ventures.

Today, the money is starting to dry up. Big ambitions have been downsized. And the tremors that continue to shake many newspapers are now moving through new media companies.

Among those facing head winds are BuzzFeed, Vox and Vice. Another one, Mic, last week abruptly laid off most of its staff — and the company that a year ago was valued at $100 million garnered a fire-sale offer of $5 million for its remnants.

The numbers tell the story: Investors closed 27 deals worth about $206 million in 2014 but are on track to close just 19 such deals worth $130 million this year, according to PitchBook, a private capital market data provider.

One reason for the wariness among venture capitalists is many sites relied on Facebook and Google to build their audience. But just as many financiers were pressing to see more tangible financial results, Facebook changed its algorithm to favor posts from friends and family rather than news organizations.


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