semafor: Semafor, the global news media start-up, opens up to an Indian partner to launch a local edition
Seven months later, the media company – Semafor – has raised $25 million in seed funding and has hired more than 35 top journalists, business executives, product and technology professionals. It’s set to launch this fall in the US with Africa. After staying away from venture capitalists, the outlet attracted investors including former Atlantic owner David Bradley; American Journalism Project founder John Thornton; Sam Bankman-Fried, founder of crypto exchange FTX; Jorge Paulo Lemann, co-founder of 3G Capital, and Jessica Lessin, founder of tech publication The Information, as some of his backers.
Semafor has ambitious plans undeterred by the onslaught facing most digital media companies due to tech giants Google and Facebook hogging most advertising dollars. Instead, the startup will double its hiring, grow its team size to 70 by October when it goes live, unaffected by macroeconomic headwinds that have led to job cuts and a major slowdown. in businesses around the world.
It is looking to forge partnerships in India to enter with a local edition very soon, Smith told ET in conversation during a visit to Mumbai recently. Indian regulations do not allow international publications to operate independently due to restrictions on foreign direct investment (FDI). “An Indian edition is really our plan over time, and we look forward to partnering with a media company here to pursue this opportunity together,” Smith said. Currently, Semafor offices are spread across London, New York and Washington, DC, with a team outside of Africa. “We will create regional and national products sequentially in the Middle East, Asia, Europe and Latin America,” he said.
Legacy global news outlets like The New York Times, Washington Post, CNN are the ones Semafor tries to disrupt. Major US and even UK media brands have viewed international markets as an afterthought, Smith said. From the beginning, we wanted to create local offices and not send foreign correspondents to cover international markets, he added.
How will this work?
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Scoops, news and analyzes will be at the heart of the publication which will be distributed via a mobile application and a desktop site. Areas of coverage will include general news, finance, technology, climate, security, media and politics. For now, the publication will be free to read, monetization will be through advertising on its website, newsletters and events. Smith plans to introduce subscriptions in the next phase.
With a focus on individual journalists, Semafor has designed its product so that the journalist’s signatures and photos are prominently displayed to give as much information about the author.
“Our experienced leadership team is trying to address the crisis of trust in news and the first thing we do is address the idea that reader trust has shifted from institutions to individuals,” Smith said. With the advent of social media, especially the microblogging platform Twitter, and later platforms such as Substack, journalists tried to engage directly with readers. But much of the opinion-driven reporting has led to public polarization, which has affected perceptions of the media as a whole. Smith said his medium would try to differentiate between news, analysis and opinion, which in today’s media landscape have been mixed together.
Each story will be divided into sections; first the scoop, then the journalist’s point of view, an overview of the news, then a brief summary of what other media or an external expert have to say on the subject. He said Semafor reporters would offer their views and analysis of the news they report as they would on Twitter and other social media anyway, but the publication wants to separate news from opinion.
Impact of the Axios deal
The launch of Semafor follows a mega cash transaction in the new media sector. Last week, five-year-old media startup Axios, which is best known for its news and scoops on politics, business and technology, was sold for $525 million to Cox Enterprises, a group family based in Atlanta with interests in media, telecommunications, among others.
Smith said the selloff was “brilliant across the board and a sign of vitality in the news market.”
While Axios, Politico (sold for $1 billion to the German
Springer), Business Insider (Axel Springer bought a majority stake for $343 million), The Athletic (acquired by The New York Times for $550 million) stirred up the digital news industry, some of the premier platforms generation like Vice, Buzzfeed and Vox have fallen in value in recent years and job cuts have followed. “If you look at Vox, Vice, or even Buzzfeed, they just didn’t have a very strong business strategy and experienced people to execute the plan…While Politico and Axios are the best examples of new brands that have really come together very well monetized… We will be bits of Politico and Axios, more general and more global… And hopefully we will have some of the similar economic results because they are very successful companies and precious ones that have been built,” Smith said of Politico and Axios.