Amazon.com chief executive Jeff Bezos is participating in a $5 million round of funding in Business Insider, the high-metabolism online news site founded by Henry Blodget, the former Merrill Lynch tech stock analyst barred from working in the securities industry as part of a 2003 settlement with the SEC in the aftermath of the tech stock bust.
“This capital will allow us to continue to invest aggressively in many areas of the business, including editorial, tech/product, sales and marketing, subscriptions, and events. As we mentioned last night, it will also allow us to expand our office,” Blodget wrote in a memo to staffers. Blodget described Bezos’ investment as “significant” but didn’t say how much of the $5 million Bezos is contributing.
Here is what we know about BI’s financials:
- The Bezos investment brings the total raised by Business Insider to about $18 million.
- When it last raised money in 2011, the company was valued at $50 million. We’re still trying to pin down the new valuation. Blodget told AllThingsD it’s “above” $50 million and told me it’s “double super-secret.” Many of BI’s competitors are valued at much more than $50 million.
- Business Insider had $4.8 million in revenue in 2010, turning an Amazon-like profit of $2,127—yes, two thousand dollars. Revenue grew to about $7.5 million in 2011 and $10 million in 2012, but as the company expanded, it ended up losing $3 million last year. (I’ve updated this bullet point with revenue figures provided by Blodget.)
- The company has spent about $7 million of the venture capital it has raised.
As a fascinating side note, Blodget’s history with Amazon stretches back to his time as a tech stock analyst, when a bullish call on the shares of the online retailer helped propel him to stardom. As the New Yorker’s Ken Auletta recounted in his recent piece on Blodget for the magazine:
Blodget first attracted public attention in December, 1998. At the time, most analysts were focussing on Amazon’s lack of profits; Blodget analyzed the company’s swift revenue growth and projected its expansion for the next five years, predicting that its stock price would jump from two hundred and forty dollars to four hundred dollars a share. Jonathan Cohen, Merrill Lynch’s Internet analyst, disparaged the forecast, but within a month Amazon’s share price had exceeded five hundred dollars. Requests for Blodget press interviews poured in.