Quartz is being bought by a Tokyo-based media company seeking to expand its global footprint.
Uzabase, founded by two former UBS investment bankers and a technology consultant, will pay between $75 million and $110 million, depending on Quartz’s financial performance for the remainder of 2018, according to Quartz parent Atlantic Media. The deal is expected to close in the next 30 days.
Founding editor-in-chief Kevin J. Delaney and publisher Jay Lauf will be co-CEOs of Quartz. They will report to Yusuke Umeda, one of Uzabase’s founders. The Japanese company is “turning to Quartz to drive its expansion outside of Asia, with a particular eye on subscription offerings,” Delaney and Lauf told employees in a memo today (July 2), adding, “We expect the biggest source of growth in Quartz’s next chapter will come from reader revenue.” No layoffs are planned as part of the acquisition, they said.
The sale represents another step in David G. Bradley’s divestiture of his privately held Atlantic Media properties, which still include the National Journal and Government Executive. In July 2017, he signed an agreement (paywall) with Emerson Collective, founded by Laurene Powell Jobs, to sell a majority stake in The Atlantic magazine.
David Bradley on why he sold to Uzabase
In a separate memo to Quartz staff, Bradley said his decision to sell came years earlier than anticipated, the result of Uzabase reaching out to newsroom leadership last fall. At first, the company wanted to partner with Quartz. In March, a more serious conversation about a potential acquisition ensued. “Yusuke is a pure entrepreneur, an original creator of huge—and global—ambition,” Bradley wrote. “[He] and his colleagues want to retain the Quartz name and our editorial team as the foundation in building what he called, with me, ‘the leading global business news brand in the world.'”
Bradley said he will continue his involvement with Quartz as an advisor and minority shareholder.
Since its launch in 2012, Quartz has expanded to 215 staffers, including 100 journalists who operate around the world, including at its headquarters in New York. On average, the company says, more than 20 million people access Quartz each month through its sites, apps, newsletters, and videos. Its operations also include an in-house bot studio and a commercial strategy division, Quartz Creative.
In March 2017, it was reported that Quartz turned a profit in 2016, earning more than $1 million on over $30 million in revenue, almost all of it from advertising (paywall). Quartz says it is on track to increase revenue by 25%-35% this year.
Betting on paid products as a key to growth
The acquisition of Quartz is Uzabase’s first. It went public on the Tokyo Stock Exchange in 2016 and has a market cap of $870 million. Since its launch in 2008, Uzabase has invested in two major products: Speeda, a corporate-intelligence tool that aims to be a more user-friendly version of the Bloomberg terminal, and NewsPicks, a global business-news app introduced to the US market in 2017 as part of a collaboration with Dow Jones.
Quartz will take over Uzabase’s responsibility for NewsPicks’ English-language operation in the US. A spokeswoman for Atlantic Media said it is unclear whether Dow Jones’ involvement in the venture is affected. Globally, NewsPicks has about 70 staffers, 15 in the US. Nearly half of its revenue is said to come from subscriptions.
“We’ll quickly be developing paid products for the loyal audience Quartz has accrued over the past six years, building on and learning from the success that NewsPicks has had with community and paid content,” Delaney and Lauf wrote in their memo. What those paid products might be and whether Quartz will adopt any type of subscription-based model remains to be seen. The spokeswoman said specifics will be ironed out in coming months.
Many news outlets are shifting toward seeking reader revenue, making at least some of their content available only to subscribers. Digital advertising has been under increasing pressure as Facebook and Google have come to dominate the market for mobile ads. Organizations including the New York Times, the Washington Post, the Financial Times, and Business Insider have invested in digital-subscription or premium-content models that now make up substantial portions of their revenue.