BuzzFeed raises just $16.2M ahead of public listing via SPAC
BuzzFeed to begin trading on the Nasdaq under the ticker BZFD on Monday
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BuzzFeed has raised $16.2 million in trust ahead of its upcoming public listing after shareholders of special purpose acquisition company (SPAC) 890 5th Avenue Partners approved a business combination with the news publisher on Friday.
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Buzzfeed, which will begin trading on the Nasdaq on Monday under the ticker symbol BZFD, also expects to raise approximately $150 million in gross proceeds through fully committed convertible notes, for a collective total of $166.2 million in funding. The convertible note financing is led by investors from Redwood Capital Management and includes support from CrossingBridge Advisors and Cohanzick Management.
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Shares of 890 5th Avenue Partners closed at $9.91 per share on Thursday, and stockholders who elected to redeem will receive approximately $10 per share. The SPAC's shares are down more than 8% on Friday as of the time of publication.
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The funding comes as investors have pulled a majority of the approximately $288 million held in trust by the SPAC, according to the The Wall Street Journal.
During the shareholder vote, BuzzFeed's union employees staged a walkout in an effort to pressure the company to offer better pay and benefits. In addition, the union is demanding more creative control over their work and to not be disciplined over traffic and revenue metrics.
"We've been bargaining our contract for almost 2 years, but BuzzFeed won't budge on critical issues like wages — all while preparing to go public and make executives even richer," the union tweeted. "We're walking out to send a reminder that there's no BuzzFeed News without us."
BuzzFeed has offered 1% guaranteed raises per year and a proposed $50,000 salary floor.
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In the third quarter ending Sept. 30, BuzzFeed reported a net loss of $3.6 million, compared to 2.13 million a year ago. Revenue grew 30% year-over-year to $90.1 million, driven by double-digit growth in advertising and commerce revenues. Advertising revenue grew 39% to $50.2 million, while commerce revenue increased 14% to $13.4 million. Meanwhile, content revenue decreased 4% to $26.5 million.
Buzzfeed employees work at the company's headquarters in New York City on Jan. 9, 2014. (REUTERS/Brendan McDermid)
The company noted that it experienced a slowdown in commerce revenue growth compared to the first half of the year, as growth in online shopping eased from its COVID-related peak and as its partners grappled with labor shortages and global supply chain issues. BuzzFeed expects the headwinds to continue in the fourth quarter of 2021, with an anticipated negative impact on its commerce revenue.
In addition to the business combination, BuzzFeed will close a previously announced $300 million acquisition of Complex Networks, a digital publisher that specializes in streetwear and fashion, food, music, and pop culture. Complex reported a $3.1 million net loss in the third quarter, while revenue grew 9% to $31.2 million due to increased advertising demand and growth in royalty revenues from retail partnerships.