RRE was introduced to BuzzFeed founder Jonah Peretti by one of the company’s angel investors in the spring of 2010. Peretti had been one of the founders of The Huffington Post. His technical expertise and his understanding of what drives people to share media were well known to RRE. At the time, BuzzFeed had a small team of editors and programmers creating content and tracking its spread across the Internet. RRE recognized Peretti’s insight that advertisements tied to widely shared content performed radically better than their ad-industry rate cards might suggest. The RRE team was also deeply impressed by Peretti’s vision for capitalizing on this.
RRE led the company’s Series B in May 2010, investing $4 million for 14.8% of the company, with RRE’s Will Porteous assuming a board seat. Shortly after closing the round, Peretti recruited Jon Steinberg as President to lead the growth of the business. RRE had known Steinberg since 2008 and had considered recruiting him for other RRE companies. Together Peretti and Steinberg began to develop a strategy built around new, content based advertising products. Such offerings needed to be pitched to senior-level decision makers at major brands. RRE worked with the BuzzFeed team to create an enterprise sales approach that would give an advertiser a way to spend $1 million impactfully with BuzzFeed.
By mid 2011, the sponsored content strategy was starting to show promise and the company raised a new round from NEA at a meaningful step-up in valuation. Investing considerable time and resources in targeting major brands, the company booked $4 million in revenue and exited the year with a pipeline of major campaigns for 2012. Peretti recognized that he needed to continue to build his editorial team, so he recruited Ben Smith from Politico to serve at BuzzFeed’s Editor-in-Chief.
In 2012, BuzzFeed’s revenue grew to $20 million and RRE helped Steinberg and Peretti recruit CFO Mark Frackt, who had ably served as CFO of another RRE portfolio company. At this point the company raised a Series C round, again led by NEA, at a step-up of more than 3x.
Entering 2013, management forecast 150% growth, but by June forecasts were being revised upwards. Today the company is profitable and reaches over 90 million monthly unique visitors. In spite of having raised so much capital, the company has been incredibly efficient, expending only $10 million of the actual equity raised to get to this point. RRE has seen its initial -11- investment grow in value by 7.5x. Going forward, BuzzFeed is dedicated to creating a high quality news and advertising organization that can have global reach through the Internet, mobile, and video.