BuzzFeed has missed the lofty revenue predictions it pitched to Spac fund investors last year by more than 20 per cent, while the digital media group's editor-in-chief has resigned as it looks to further shrink its newsroom.
When it agreed last June to go public in a deal with a blank cheque company, BuzzFeed told potential investors its revenue would soar to $521 million in 2021, $654 million in 2022, and $1.1 billion in 2024, driven by what it called “rapid scale and monetisation with a deep understanding of virality and social”.
Special purpose acquisition vehicle 890 Fifth Avenue Partners raised $288 million ahead of its merger with BuzzFeed, but those investors pulled 94 per cent of their money out before the company went public in December.
Their caution was validated on Tuesday as BuzzFeed reported revenue for 2021 of only $398 million in its maiden annual results as a public company.
This was up from $321 million for 2020, but was boosted by two acquisitions completed last year - those of digital media companies HuffPost and Complex Networks.
Mark Schoofs, editor-in-chief of BuzzFeed's news division, told staff on Tuesday morning he was leaving the company, and that BuzzFeed would offer voluntary redundancies to "accelerate the timeline to profitability".
“That will require BuzzFeed News to once again shrink in size,” Mr Schoofs said in an internal memo, adding that there would be a “shift in editorial focus and structure”.
Overall BuzzFeed announced it would lay off about 1.7 per cent of its staff, in addition to the voluntary redundancies at its news division, the latest downsizing at the troubled company.
Shares were up 2.6 per cent in midday New York trading.
The group reported net income of $26 million for 2021, although this profit was due to a tax benefit. Excluding this, BuzzFeed posted a net loss of $528,000 for the year. – Copyright The Financial Times Limited 2022