In January, former Bloomberg Media chief executive Justin Smith said he was leaving his high-profile job to launch a news startup that would serve “unbiased journalism” to a global audience. Smith teamed up with The New York Times’ ex-media columnist Ben Smith (not related), who was also previously the editor of Buzzfeed, to cater to an estimated 150-200 million-strong English speaking, upwardly mobile, young and global readers across the world.
Seven months later, the media venture – Semafor – has racked up $25 million in seed funding and has hired more than 35 high-profile journalists, business executives, product and technology professionals. It is ready to launch this fall in the US along with Africa. Having kept away from venture capital firms, the news outlet has brought in investors including former Atlantic owner David Bradley; American Journalism Project founder John Thornton; crypto exchange FTX founder Sam Bankman-Fried; Jorge Paulo Lemann, co-founder, 3G Capital, and Jessica Lessin, founder of tech publication The Information, as some of its backers.
Semafor has ambitious plans undeterred by the onslaught faced by most digital media businesses due to tech giants Google and Facebook cornering most of the ad dollars. Instead, the startup will double down on hiring, bulk up its team size to 70 by October when it goes live, unaffected by macroeconomic headwinds that have led to job cuts and a significant slowdown across businesses globally.
It is looking to strike partnerships in India to enter with a local edition sometime soon, Smith told ET in a chat while on a visit to Mumbai recently. Indian regulations do not permit international publications to run independently due to foreign direct investment (FDI) restrictions. “An Indian edition is very much our plan over time, and we look forward to partnering with a media company here to pursue that opportunity together,” Smith said. Presently, Semafor’s offices are spread across London, New York and Washington, DC, along with a team out of Africa. “We’ll be creating regional and national products sequentially across the Middle East, Asia, Europe, Latin America,” he said.
The legacy global news outlets like The New York Times, The Washington Post, CNN, are the ones Semafor is trying to disrupt. The big American and even British media brands have viewed the international markets as an afterthought, Smith said. From the very start we wanted to create local bureaus and not send foreign correspondents to cover the international markets, he added.
How will it work?
Former Bloomberg Media chief executive Justin Smith & NYT’s ex-columnist Ben Smith | Illustration: Rahul Awasthi
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Scoops, breaking news and analysis will form the crux of the publication which will be distributed through a mobile app and a desktop site. Areas of coverage will include general news, finance, technology, climate, security, media and politics and policy. For now, the publication will be free to read, monetisation will come through advertising on its website, newsletters and events. Smith plans to introduce subscriptions in the next phase.
With the focus on individual journalists, Semafor has designed its product in a way that the reporter’s bylines and pictures will be prominently displayed to give as much information about the author.
“Our experienced executive team is trying to solve the crisis of trust in news and the first thing we are doing is that we’re going to lean into the idea that trust of readers has shifted from institutions to individuals,” Smith said. With the arrival of social media, particularly microblogging platform Twitter, and later on platforms such as Substack, journalists have tried to engage directly with readers. But a lot of the opinion-driven reporting has led to polarising audiences which has affected media’s perception at large. Smith said his outlet would try to differentiate between news, analysis and opinion, which in today’s media landscape has been blended.
Each story will be divided into sections; first the scoop, then the views of the reporter, a global take on the news and then a quick wrap of what other media or an external expert has to say about the topic. He said Semafor reporters would offer their views and analysis of the news they break as they would anyway do it on Twitter and other social media, but the publication wants to separate news from opinion
Impact of the Axios deal
Semafor’s launch comes close on the heels of a mega all-cash deal in the new media sector. Last week, five-year-old media startup Axios, which is primarily known for its crisp, breaking news and scoops in politics, business, and technology, was sold for $525 million to Cox Enterprises, an Atlanta-based family-owned group with interests in media, telecommunications, among others.
Smith said the sale was “brilliant on all levels and a sign of vitality of the news market.”
While Axios, Politico (sold for $1 billion to Germany’s
Springer), Business Insider (Axel Springer bought controlling stake for $343 million), The Athletic (acquired by The New York Times for $550 million) have stirred up the digital news sector, some of the first-generation platforms like Vice, Buzzfeed and Vox have slumped in valuation in recent years and jobs cuts have followed. “If you look at Vox, Vice or even Buzzfeed, they just didn’t have a very strong business strategy and experienced people to execute the plan…Whereas Politico and Axios are the best examples of new brands that have really monetized extremely well… We will be pieces of Politico and Axios, more general interest and more global… And, hopefully, will have some of the similar economic outcomes because these were very successful, valuable businesses that were built” Smith said while talking about Politico and Axios.
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