Crowdsourced news distribution startup and ASX Listed company Newzulu, founded by Australian entrepreneurs Alexander Hartman and Peter Scarf, announced this morning that it has closed a $11.5 million funding round.
Newzulu is a platform that houses over 100,000 professional and citizen journalists who share validated news photos, videos, and text.
“This $11.5 million capital raising is a great step forward for Newzulu and demonstrates the belief of investors in Newzulu’s business model. We believe Newzulu has the ability over the next two years to build significant revenues through selling software platforms, editorial services like Newzulu Live, and brand creative services globally. I am grateful to investors for their support of Newzulu and am confident we can successfully execute on our Business Plan, particularly over the next two years as we take Newzulu Live to market,” said Hartman in a statement to the ASX.
This announcement values Newzulu at around $57.5 million, following its agreement in October last year to acquire leading Canadian media and brand software platform company Filemobile, Inc. for up to AUD$5.06 million in cash settling.
To fund the acquisition, Newzulu undertook this most recent capital raise, re-complying with Chapters 1 and 2 of the ASX Listing Rules in respect to the acquisition.
The acquisition of Filemobile, a software company that provides solutions to media outlets and brands for the gathering, curation, and publishing of user-generated content, has brought with it a list of major white-label media clients including AAP, Fox News, The Wall Street Journal, USA Today, Hearst TV, iTV, London Live, Network Ten Australia, as well as global brands like Kraft, Under Armous, Cisco, Allrecipes.com and JC Penney, among many others.
The acquisition has helped the company in its plans to establish itself in the US market, in which the news and content marketing industry generated over USD$50 billion in annual revenue alone in 2014.
In addition to the full circle completion and integration of the Filemobile acquisition, the proceeds of the raising will also be used as working capital for the expansion of the Newzulu team, particulary into the USA and European markets. According to a statement made by the company, Newzulu will also be launching a live video news stream and a proprietary platform for advertisers and brands.
The funding round saw investment from a range of media-related investors, institutional investors, high net worth individuals, Directors and existing shareholders of the Company.
In addition to closing the funding round, Newzulu has also appointed Karen Logan as its company secretary. Logan, who has over 10 years experience in compliance matters, has held consultancy and company secretarial positions with ASX-listed and unlisted companies in various industries. She is also an Associate of the Institute of Chartered Secretaries and Administrators, a Fellow of the Financial Services Institute of Australasia, and a Graduate Member of the Australian Institute of Company Directors.