The popular news app News Break is announcing that it has raised $115 million in new funding.
\nThe press release claims this round makes News Break \u201cone of the first new unicorns of 2021,\u201d but the startup declined to disclose its actual valuation.
\nFounder and CEO Jeff Zheng said that when he started the company in 2015, the goal was to differentiate itself from other news aggregation apps by focusing on local news, and to \u201chelp or empower these local content creators.\u201d<\/p>\n
To be clear, you can find similar stories in News Break that you\u2019d see in other news apps (there\u2019s a whole section for coronavirus news, for example, and this morning you\u2019ll see plenty of headlines about yesterday\u2019s violent takeover of the U.S. Capitol), but you\u2019ll also see plenty of stories that are highlighted specifically based on your location.<\/p>\n
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\u201cTechnology is interweaving with every aspect of the company \u2014 in how we empower local publishers and local journalists to generate content more effectively and to reach an online audience more effectively,\u201d Zheng said. \u201cWe have AI tools to help provide all these relevant articles \u2026 We have location profiles and what you\u2019re most interested in, which we basically match against the content.\u201d<\/p>\n
Jeff Zheng. Image Credits: News Break<\/p>\n
The local focus may be increasingly valuable given the broader economic challenges facing the local news business\u00a0\u2014 as Zheng put it, there\u2019s \u201cstrong user demand\u201d for local news but \u201cweak supply.\u201d And the strategy seems to have paid off for News Break so far, with the app\u00a0reaching the top spot in the News category of Apple\u2019s U.S. App Store multiple times (it\u2019s currently ranked No. 4), and in Google Play as well. The startup says it\u2019s currently reaching 12 million daily active users.
\nZheng said that while News Break already shares ad revenue with publishers, he\u2019s hopeful that the value it provides those publishers will only grow over time: \u201cWe want to give as much money back to the creators as possible.\u201d
\nWhen I suggested that publishers and journalists may be leery about relying too much on a third-party platform to reach their audience, Zheng argued that News Break\u2019s incentives are very different from the big internet and social media platforms.
\n\u201cWe are local-centric,\u201d he said. \u201cIf local publishers are struggling, if the newspapers are diminishing every year, then sooner or later we are out of business.\u201d
\nAnd while Zheng previously led Yahoo Labs in Beijing and was also founding CEO at Chinese news startup Yidian Zixun \u2014 plus, the startup has team members in Beijing and Shanghai \u2014 he emphasized that this is a \u201cU.S. high-tech company incorporated in Delaware, headquartered in Mountain View,\u201d with the majority of its workforce in the United States and a focus on the U.S. market. The distinction could become important if News Break continues to grow, given the U.S. government\u2019s current attempts to ban some Chinese companies.<\/p>\n
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News Break previously raised $36 million in funding. The new round was led by Francisco Partners, which is taking a seat on the News Break board. IDG Capital also participated.
\nIn a statement, Francisco Partners Principal Alan Ni said:
\nNews Break\u2019s breakout multi-year successes in the local news space is what first brought them to our attention. We are inspired by their mission and extremely impressed by the work they have done to bring local-news distribution into the 21st Century through cutting-edge machine learning and media savvy. We are thrilled to be partnering with News Break\u2019s talented leadership team as they continue to drive local news innovations while also rapidly expanding their business into adjacent local verticals beyond news.<\/p>\n
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