NewsCred raises £15m to expand content platform
Thursday 23 January 2014
NewsCred, a marketing technology firm that creates and
licenses editorial content for businesses, was today valued at an estimated
£120 million after it raised £15 million to expand in London.
Silicon Valley investors Interwest Partners are behind the latest round of funding which will see New York-based NewsCred hire around a dozen staff in London for a European expansion drive this year.
Chief executive Shafqat Islam said demand was soaring from clients such as Procter & Gamble, Pepsi UK and Visa as they look at new ways beyond advertising to communicate directly with consumers.
He claimed big name-brands “are now diverting major advertising spend towards news publishing and branded content” to appear on their own websites and social media — a trend dubbed content marketing.
“The reason why brands are spending money on content is they have built up massive audiences on a variety of marketing channels where they have one-to-one relationships [with consumers],” explained Islam, referring to the rise of Facebook, Twitter and YouTube – sites on which brands can have millions of followers.
“All of these channels give them access to audiences that they didn’t have before — 50 years ago, 20 years ago, even 10 years ago. But they need fuel to put into these channels.”
He went on: “If you take a drinks company, they’re great at creating fizzy drinks, but they’re not so great at creating highly engaging and compelling content and that’s where we come in.”
Clients use News Cred to commission original editorial content and to licence it from over 4,500 publishers including the BBC, The Economist, The Independent and many others worldwide.
“Our mission is to provide access and licence every piece of quality journalism in the world,” said Islam, who maintained News Cred does “no scraping” of content from third-party websites without permission.
News Cred pays publishers a monthly fee, based on the amount of content that it licenses to clients. The company also commissions original articles and other material – mostly from freelancers, who receive “the entire fee” as NewsCred makes better margins from licensing its software alongside the content to clients. News Cred pays as much as $1000 for long articles.
“We believe it’s important to fund journalism and drive new revenues,” said Islam, who explained syndicating editorial content was good for publishers as revenue falls straight to the bottom line because there is little cost involved.
Islam claimed NewsCred’s customer base tripled and revenue increased 400 per cent last year.
The seven-year-old company is not profitable as it continues to reinvest. He would not reveal what valuation investors have put on News Cred.
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