SmartNews, a Tokyo-based news aggregation website and app that continues to grow in popularity despite stiff competition from integrated aggregators like Apple News, announced today that it has completed $ 230 million in Series F funding. The round brings the total revenue of SmartNews to over $ 400 million to date and values the business at $ 2 billion – or as the company states in its press release, a “double unicorn”. (Ha!)
The financing included the new US investors Princeville Capital and Woodline Partners as well as JIC Venture Growth Investments, Green Co-Invest Investment and Yamauchi-No.10 Family Office in Japan. Existing investors participating in this round included ACA Investments and SMBC Venture Capital.
Founded in Japan in 2012, the company launched in the US in 2014 and expanded its local news presence early last year. While the app’s content team includes former journalists, machine learning is used to choose which articles to show readers to personalize their experience. One of the main differentiators of the app, however, is how it pops users’ “filter bubbles” with the “news from all sides” feature, which allows its users to access news from a range of political perspectives.
It has also developed new products, such as the Covid-19 Vaccine Dashboard and the US Election Dashboard, that provide important information at a glance. With the additional funding, the company plans to develop additional features for its US audience – one of the largest alongside Japan – that will focus on consumer health and safety. These will be rolled out over the next few months and will include forest fire tracking, crime and security reporting features. It also recently launched a hurricane tracker.
The aggregator’s business model is largely focused on advertising, as the company has previously said that 85-80% of Americans don’t pay to subscribe to the news. However, SmartNews believes that these news consumers still have a right to access to quality information.
In total, SmartNews has relationships with over 3,000 global publishing partners, whose content is available through its service on the web and mobile devices.
To generate revenue, the company sells inline ads and video ads, where the revenue is shared with publishers. Over 75% of the publishing partners also use the “SmartView” function. This is the app’s quick-read mode and an alternative to something like Google AMP. Here users can quickly load an article to read even when they are offline. The company promises publishers that those mobile-friendly stories marked with a lightning bolt icon in the app will generate higher engagement – and the algorithm rewards this type of content and gets them more readers. SmartView partners include well-known brands such as USA Today, ABC, HuffPost, and others. Currently, over 70% of all SmartNews page views come from SmartView first.
SmartNews ‘app has proven to be very sticky to grab and hold users’ attention. Citing data from App Annie in July 2021, the company tells us that the average time spent per user per month on US mobile devices is higher than Google News or Apple News combined.
Photo credits: App Annie data from SmartNews
The company declined to share its monthly active users (MAUs) but said it had grown to 20 million in 2019 in the US and Japan. Today it is said that the US MAUs doubled in the last year.
According to Apptopia, the SmartNews app has recorded around 85 million downloads since it was launched in October 2014, 14 million of them in the last 365 days. Japan is the largest market for installations, accounting for 59% of lifetime downloads, the company found.
“This latest round of funding confirms the strength of our mission and fuels our drive to grow our footprint and introduce features that are especially attractive to users and publishers in the US,” said Ken Zuzuki, Co-Founder and CEO of SmartNews. “Our investors in both the US and around the world recognize the tremendous growth potential and value of SmartNews’ efforts to democratize access to information and create an ecosystem that benefits consumers, publishers and advertisers,” he added.
The company says the new funds will be used to invest in further US growth and add to the company’s team. Since its last fundraiser in 2019, which turned it into a unicorn, the company has more than doubled its workforce to around 500 employees worldwide. It now plans to double its workforce from 100 in the US, with additions in engineering, product and leadership roles.
The Wall Street Journal reports that SmartNews is considering an IPO, but the company refused to comment.
The SmartNews app is available on iOS and Android in more than 150 countries worldwide.