Seven months later, the media company – Semafor – has raised $25 million in seed funding and hired more than 35 high-profile journalists, business executives, product and technology professionals. It is set to launch this fall in the US along with Africa. After staying away from venture capital firms, the news outlet has attracted investors such as former Atlantic owner David Bradley; John Thornton, founder of the American Journalism Project; Sam Bankman-Fried, founder of crypto exchange FTX; Jorge Paulo Lemann, co-founder of 3G Capital, and Jessica Lessin, founder of the technology publication The Information, as some of its sponsors.
Semafor has ambitious plans that are unaffected by the onslaught facing most digital media companies from tech giants Google and Facebook cornering most of the ad dollars. Instead, the startup will double hiring, grow its team size to 70 by October when it goes live, unaffected by macroeconomic headwinds that have led to job cuts and a significant slowdown in companies worldwide.
It is looking for partnerships in India to enter into a local edition soon, Smith told ET in a chat during a visit to Mumbai recently. Indian regulations do not allow international publications to operate independently due to foreign direct investment (FDI) restrictions. “An Indian edition is very much our plan over time, and we look forward to partnering with a media company here to pursue that opportunity together,” Smith said. Currently, Semafor offices are spread across London, New York and Washington, DC, along with a team outside of Africa. “We will create regional and national products sequentially in the Middle East, Asia, Europe and Latin America,” he said.
Legacy global media like The New York Times, The Washington Post, CNN, are what Semafor is trying to disrupt. Major American and even British media brands have seen international markets as an afterthought, Smith said. From the beginning we wanted to create local offices and not send foreign correspondents to cover international markets, he added.
How will it work?
Former Bloomberg Media CEO Justin Smith and ex-NYT columnist Ben Smith | Illustration: Rahul Awasthi
Details, breaking news and analysis will be the crux of the publication which will be distributed via a mobile app and a desktop site. Areas of coverage will include general news, finance, technology, climate, security, media and politics and policy. For now, the publication will be free to read, monetization will come through advertising on its website, newsletters and events. Smith plans to introduce subscriptions in the next phase.
Focusing on individual journalists, Semafor has designed its product in such a way that the authors and images of the journalist will be prominently displayed to give maximum information about the author.
“Our experienced executive team is trying to solve the crisis of trust in news, and the first thing we’re doing is building on the idea that readers’ trust has shifted from institutions to people,” Smith said. With the advent of social media, especially the microblogging platform Twitter, and later on platforms such as Substack, journalists have sought to engage directly with readers. But much of the opinion-driven reporting has led to polarized audiences, which has affected the perception of the media in general. Smith said his medium would try to differentiate between news, analysis and opinion, which in today’s media landscape have become mixed.
Each story will be divided into sections; first the scoop, then the reporter’s views, an overview of the story, and then a quick summary of what other media or an outside expert is saying about the topic. He said Semafor journalists will offer their opinions and analysis of the news they report as they would anyway on Twitter and other social networks, but the publication wants to separate news from opinion.
Impact of the Axios deal
Semafor’s launch comes on the heels of an all-cash mega deal in the new media sector. Last week, five-year-old media startup Axios, known primarily for its news and updates in politics, business and technology, was sold for $525 million to Cox Enterprises, a family-based group based in in Atlanta with interests in media, telecommunications, among others.
Smith said the sale was “brilliant across the board and a sign of news market vitality.”
While Axios, Politico (sold for $1 billion in Germany
Springer), Business Insider (Axel Springer bought a controlling stake for $343 million), The Athletic (acquired by The New York Times for $550 million) have awakened the digital news industry, some of the first generation like Vice, Buzzfeed and Vox. they have fallen in value in recent years and job cuts have followed. “If you look at Vox, Vice, or even Buzzfeed, they just didn’t have a very strong business strategy and experienced people to execute the plan…Whereas Politico and Axios are the best examples of new brands that have really monetized good. We’re going to be pieces of Politico and Axios, more general and more global interest … And hopefully we’ll have some of the similar financial results because very successful and valuable businesses were built,” Smith said while talking about Politico and axes
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