BuzzFeed raised $ 16.2 million in trust assets ahead of its upcoming public listing after shareholders in special purpose vehicle 890 5th Avenue Partners (SPAC) approved a business combination with news publisher 890 5th Avenue Partners on Friday.
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Buzzfeed, trading on Monday under the ticker symbol BZFD on the Nasdaq, also expects to generate gross proceeds of approximately $ 150 million from fully committed convertible bonds, for total funding of $ 166.2 million. The convertible bond financing is led by investors from Redwood Capital Management and includes support from CrossingBridge Advisors and Cohanzick Management.
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890 5th Avenue Partners shares closed at $ 9.91 per share Thursday, and shareholders who have chosen to redeem it will receive approximately $ 10 per share. The SPAC share lost more than 8% on Friday at the time of publication.
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The funding comes as investors withdrew a large part of the roughly $ 288 million held in trust by the SPAC, according to The Wall Street Journal.
During the shareholders’ vote, BuzzFeed union workers held a strike to pressure the company to offer better wages and benefits. In addition, the union is calling for more creative control over its work and no discipline over traffic and sales metrics.
“We’ve been negotiating our contract for almost 2 years, but BuzzFeed won’t give in on critical issues like wages – while preparing to go public and make executives even richer,” the union tweeted. “We’re going out to send a reminder that without us there won’t be BuzzFeed News.”
BuzzFeed offers 1% guaranteed salary increases per year and a proposed lower salary of $ 50,000.
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For the third quarter that ended September 30, BuzzFeed recorded a net loss of $ 3.6 million, compared to $ 2.13 million a year ago. Revenue rose 30% year over year to $ 90.1 million, driven by double-digit increases in advertising and retail revenue. Advertising revenue increased 39% to $ 50.2 million, while trading revenue increased 14% to $ 13.4 million. Meanwhile, content revenue fell 4% to $ 26.5 million.
The company found it saw a slowdown in retail sales growth compared to the first half as online shopping growth slowed from its COVID-related peak and its partners grappled with labor shortages and global supply chain issues. BuzzFeed expects the headwinds to persist in the fourth quarter of 2021, with an expected negative impact on its trading revenues.
In addition to the business combination, BuzzFeed will complete a previously announced $ 300 million acquisition of Complex Networks, a digital publisher specializing in streetwear and fashion, food, music and pop culture. Complex posted a net loss of $ 3.1 million in the third quarter, while revenue rose 9% to $ 31.2 million due to increased advertising demand and growth in license income from retail partnerships.
