Paidcontent.org Receives First Round Funding
Rafat Ali, founder and de facto CEO of digital media blog network Paidcontent.org, and recent FOLIO:40 member, received first-round funding this month from Apax Partners co-founder Alan Patricof’s new fund Greycroft Partners. According to Ali, Patricof’s minority stake is "less than a million" and will allow him to expand product offerings and build out an infrastructure for what has been for the last four years a highly successful, if cobbled together, news organization covering the digital content markets.
"I started the site four years ago, without any thought that it would become a business," says Ali. "It just grew by default, which is great because it was all organic and low-cost. But it needs systems in place now–all the general back office stuff needs to be done."
According to Ali, Paidcontent.org has been profitable from the get-go; cashflow funded and supported by contract freelance talent and an emphasis on content generation. From 2003 to 2004, the company grew about 65 percent and spiked the following year, growing 500 percent between 2004 and 2005. "This year, we should at least grow three-times revenues," says Ali. Revenues in 2005, he says, were in the low to mid six figures and are expected to break the seven-figure barrier this year.
Jeff Stern, former Details president and publisher, was hired recently as an interim COO to develop partnership deals and bring some formal operational structure to the company.
Ali plans to use some of his new funding to expand his event products through a series of small, market-focused networking mixers and seminars. "I’m a fan of the focused half-day conferences because for me the biggest thing is editorial control in the sense that it has to be editorially driven and not driven by sponsors. At a bigger conference, that becomes more difficult as more people come into play. The world doesn’t need another digital media conference," says Ali.
The two main Web sites (Paidcontent.org and Moconews.net), which between them generate about five million monthly visitors, will be redesigned in an effort to free up more advertising real estate, which is currently sold out through the end of the year. Total daily newsletter subscribers are about 27,000 and another 17,000 readers subscribe to the RSS feeds. A UK-based Web site is also in the works.
Patricof’s stake in Paidcontent.org comes at a time of intense interest in operations like this. Ali says that he was not actively courting investors and was fielding overtures from "any company you can think of in the trade media space."
For his part, Patricof said in a statement announcing his investment, "I look at blogs as the hyper-interactive magazines of the future, only with far greater ability to create communities and expand into new areas."