Cable television provider Altice USA has confirmed plans to pay $200 million for the millennial-focused, digitally native news network Cheddar in an all-cash, or all-cheddar, rather, deal. The price tag comes at a 25 percent premium to the media startup’s $160 million Series D valuation.
Jon Steinberg, the co-founder and chief executive officer of Cheddar and former president and chief operating officer of BuzzFeed, will become president of Altice News. Altice, an existing Cheddar investor, plans to leverage Cheddar’s broadcasts and CheddarU, a growing network of 1,600 screens on 600 college campuses, to expand its portfolio of news businesses.
“Our goal is to make Altice News a leader in local, business, national and international news everywhere,” Steinberg said in a statement. “The Altice team and Altice Way are as entrepreneurial as it gets with amazing markets, world-class local and international news, an amazing broadband network, and a soon to launch mobile offering.”
Cheddar declined to provide further comment.
Altice News, a new unit born out of the Cheddar acquisition, will include Cheddar, News 12 Networks and international and current affairs news network i24NEWS.
Founded in 2016, the New York-headquartered Cheddar operates its flagship business newscast on the trading floor of the New York Stock Exchange, as well as three other programs at its studio in New York’s Flatiron Building, WeWork Vine in Hollywood and the White House.
The company, dubbed the “CNBC of the internet,” focuses on business news and the top headlines with 19 hours of programming per day. In a short time, the “fast-paced, young, non-partisan general and headline news network” has inked key partnerships to become widely available across platforms. Currently, its programs are viewable in 40 million homes on Sling TV, DirecTV NOW, Hulu, YouTube TV, Sony PlayStation Vue, Snapchat, fuboTV, Philo, Amazon, Twitch, Twitter, Facebook and 60 percent of smart TVs in the U.S. Cheddar attracts 400 million video views per month.
Cheddar had raised a total of $54.5 million in equity funding across four financings. Its investors include Lightspeed Venture Partners, Raine Ventures, Goldman Sachs, Liberty Global, Comcast Ventures, AT&T, Amazon, Antenna Group, Ribbit Capital, The New York Stock Exchange, Altice USA, 7 Global Capital and Dentsu Ventures. Here’s a closer look at Cheddar’s funding history, per PitchBook:
- February 2016 Series A: $3 million at a $15 million valuation
- September 2016 Series B: $10 million | $40 million
- May 2017 Series C: $19 million | $84 million
- March 2018 Series D: $22.5 million | $160 million
The transaction is expected to close in the next two months.
“Cheddar has demonstrated an innovative approach to live news while building an engaged audience, solid followership and a strong brand,” Altice CEO Dexter Goei said in a statement. “As one of Cheddar’s early investors, we have enjoyed our partnership with Jon and admire the entrepreneurial spirit, energy and smart disruptive mentality that he brings to the news business.”
The deal represents a rare outcome for a digital media startup, a sector plagued by sudden shutdowns and slipping revenue figures. Mic, a similarly millennial-focused news outlet, laid off most of its staff last year before being acquired by Bustle for peanuts. The business was well-funded by venture capitalists, raising a total of $60 million before falling victim to Facebook’s 2017 algorithm change.
There’s more where that came from. Vice earlier this year confirmed plans to cut 250 jobs, BuzzFeed is laying off 15 percent of its staff and Verizon Media Group (TechCrunch’s parent company) laid off 10 percent of its workforce in January. Just this week Brit&Co, a digital media brand catering to young women, began laying off a majority of its staff after an M&A deal failed to come together at the last moment, according to Recode.
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