That SmartNews is a unicorn is notable, as news-related venture-backed companies have , or found themselves . SmartNews, which partners with external media companies (including Crunchbase News), helps provide traffic to a number of publishers. For a smaller cohort, SmartNews also pays for its part of the deal.

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I was curious about the deal, so I spent a little time collating some reported figures. SmartNews didn’t share much more than what I already knew regarding its revenue base, but let’s do what we can to understand the investment in the light of a media landscape that I don’t need to tell you is troubled.

SmartNews

As part of its fundraise, SmartNews put out a few new usage metrics. It re-released a monthly active user (MAUs) result, and some metrics on its audience growth in the United States. After sifting through the figures released with the round and looking around for historical records, we decided to put today’s figures (included below) in context.

Here’s what we could find regarding SmartNews’s MAU user growth around the world (the service is focused on the Japanese and U.S. markets):

• January 22, 2015: 5 million MAUs (combined data, )
• July 21, 2018: 10 million MAUs ()
• June 26, 2019: 15 million MAUs ()
• August 5, 2019: 20 million MAUs (source)

Turning to the United States market, the numbers are a bit harder to figure out.

The company in the United States back in 2015 after the service had been in the market for around three months. Today, the company said that it has seen “US growth [of] 500% year over year per an independent report.” The company described this as “strong momentum” that it expects “will continue.”

Whenever you see a number like 500 percent, your first question must be from what base. It’s hard to say in this case. But, it seems fair to say that unless a huge percentage of the company’s aggregate DAUs are from the United States, the company’s product spent a few years in the doldrums after that initial burst of interest; we can tell that from the 1 million MAU result from 2015 and the amount of time that has passed.

Regardless, the MAU results give context as to how SmartNews managed to raise so much more money after its earlier $28 million raise back in August; the company grew its MAU base by a third in just a few months (give or take, we’re talking about opaque metrics and timings). That is the sort of growth that makes private capital sit up and take notice.

Speaking of money, how much money is SmartNews bringing in? The company provided us with the following note: “[W]e are generating a nine-figure annual revenue.” That seemed interesting, so we asked if the number was net or gross. The company replied that “9 figures is [its] total gross revenue” (emphasis: Crunchbase News).

From that point, I wanted to know if the figure led to a lower net revenue result, or if the sum was merely the company’s GAAP-equivalent revenue that it distributed in part to publishers.

Or more simply, did the nine-figure point include revenue that wouldn’t count as net under GAAP, making it more of a GMV-styled result that included funds that would pass-through to partners? If so, the nine-figure point might be a bit optimistic.

The company, at that point, didn’t have anything more to add. What we know, then, is merely that SmartNews is managing to drive substantial commercial activity through its product. Presuming the smallest nine-figure revenue number, $100 million, SmartNews is worth about 12 times revenue. It’s a smaller number than that, of course, but that’s a maximum multiple.

Toss in the company’s recent user growth as a proxy for top-line expansion and that figure slims even further, provided that the revenue figure all collects under the roof of SmartNews.

So, that’s what I got. I hope some of it was useful!

Illustration: .

, a self-described “news app” that claims 500 percent userbase growth in the United States over the past year, has raised a fresh round of capital. The new values the firm at $1.1 billion, it announced. SmartNews previously led by the Ìý²¹²Ô»å led by .

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The Tokyo-based company has raised since it was born in 2012. SmartNews stated in a release that it has 20 million monthly active users, or MAUs, in the United States and Japan.1 In June it that SmartNews had 15 million DAUs.

Here’s a look at the company’s fundraising history:

The news that SmartNews had raised a nice chunk of new money received normal coverage from the technology and business press (here’s and ). It also picked up a little doubt. , the former founder of , a publication focused on the economics of media before selling in 2012, weighed in as well.

In Ali said the following:

Hasn’t everyone learned this lesson already, chasing unicorn status for media startups is likely the kiss of death? Of what use is putting that giant target on your back, when the buyers are scarce?

His argument is twofold. First, that this sort of fundraise tells other companies that the SmartNews market is lucrative, possibly leading to competition or a squeeze from platforms. And, second, that it’s hard to exit a media company at such a high price.

Both criticisms are valid. Media-focused startups haven’t had a great run in America in recent quarters. However, the landscape abroad looks a bit different.

Aggregation For Fun And Profit

Media-focused upstarts have a bad rap in America. With the , the , the , and , it’s difficult to be optimistic about the future of media and news-centered startups domestically.

But the local market is not the global market. Outside of this country’s borders, there’s reason for optimism regarding media apps and news aggregators in particular.

Two examples come to mind. First, China-based , a Tencent-backed news aggregation app that the “number two mobile content aggregator” in that country. It went public last year, and despite shedding most of its value while public, is still worth over $1 billion. (Crunchbase News coverage of the company’s financials here.)

And second, . Part of the empire in China, Jinri Toutiao is worth about $20 billion . ByteDance, Toutiao’s parent company, is best known in the United States for the success of its TikTok social application. led the $2 billion investment.

While China-based apps seem to have the highest valuations (read up on the for more on the country’s domestic media market), it’s not impossible to imagine the model (and, therefore, the success) working again. Perhaps SmartNews can pull it off.

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