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Everyone in the tech world is talking about unicorns—but most companies that are part of this no-longer-rare breed are in Silicon Valley. D.C. in particular has had few (if any) companies valued at $1 billion while still privately held. (The region has certainly had some recent ones reach that valuation upon acquisition or IPO however—more on that below.)
Now, though, D.C. is in the unicorn game with Vox Media's newest funding. Vox, which is jointly headquartered in D.C. and New York, has just raised a $200 million round from NBCUniversal that values the company at more than $1 billion, post-money. DC tech is also involved in another way, with other investors in the company including former AOL chief Ted Leonsis, now with Revolution.
Vox is best known as the publisher of SB Nation, Vox.com, Eater, The Verge and Re/code.
Whether those franchises will look any differently following the money from Comcast-owned NBCUniversal isn't clear yet—though presumably some of Vox's brands might start popping up on NBC properties and vice-versa. One thing that is clear is that rumors that Comcast or NBCU planned to simply acquire Vox were premature. Any discussions they did have in that regard fell apart earlier this year, clearing the way for this funding.
But it's more than just branding that makes Vox worth so much money to NBCU—the technology behind the scenes that makes Vox work is a lot more valuable. Central to the approach is Vox's proprietary content management system, Chorus. Vox Media CEO Steve Bankoff has described Chorus as Vox's "primary asset," and with good reason; the CMS was modeled after the designs of the sports blogs that were Vox's first brands. The system was one of the first to use word recognition to keep it organized and to keep an eye on the comment section and embedded widgets to integrate the content with social media and other commentary.
"They had the technology we thought we were inventing."
The CMS is a platform well-suited for bigger media, not to mention a larger scale of advertising. Its design came from IT specialists and bloggers working together to make the whole interface as intuitive as possible. It was even an important part of what led Ezra Klein to leave The Washington Post to run Vox.com, according to what he told The New York Times. A lot of what other media companies are doing is trying to catch up with Chorus. As Klein put it, “They had the technology we thought we were inventing.”
Now, instead of shelling out a billion dollars to buy Vox though, NBCU can spend the relatively lesser sum of $200 million to get access to it for its own brands. In a statement, NBCU CEO Steve Burke touted Vox's "unique technology platform" and said he looked forward to a "collaborative partnership involving editorial content, advertising and technology.”
Whatever the reasons for the investment or future plans for Vox, its place as a unicorn in D.C. makes it an outlier. In the realm of other D.C. unicorns: EMC bought local cloud enterprise startup Virtustream for $1.2 billion in May, while event management platform Cvent went over $1 billion in value in its IPO and and utility management firm Opower's market cap after its IPO also broke through a billion dollars.
Investors will be watching to see just how durable Vox's new value is. Vox doesn't have to disclose its financials since it's not publicly traded, but it is apparently profitable according to leaks reported by The Wall Street Journal. If Vox can maintain and even grow its profits thanks to the NBCU arrangement, it might just be a unicorn that sticks around.
