Guardian Media Group has created a £42 million — or about $55 million — venture-capital fund, called GMG Ventures, to invest in start-ups focused on media technology.
The fund supports the development of the 110-year-old British media company's “core news business,” the company stated, “in a sector that faces ongoing disruption."
It is just one of many media organizations looking for other sources of revenue outside traditional advertising.
CEO of GMG, David Pemsel, will chair the venture capital fund. Alan Hudson, who joined GMG as chief investment officer in 2011, will become managing partner of GMG Ventures.
Jonathan Evans will lead GMG’s endowment fund as head of investments.
The Guardian has previously invested in Founders Factory, a startup incubator, which will now be managed by GMG Ventures.
The venture capital fund is looking for investments in areas ranging from improvements to readers’ experience to ad tech. That includes artificial intelligence, machine learning, payment tools, and new forms of content distribution, via audio and voice platforms or virtual, mixed and augmented reality models.
The launch comes as GMG, the parent company of The Guardian and The Observer, is in the midst of a three-year plan to cut costs by 20% to balance its books by 2019. In the last financial year, it lost £45 million (or about $59 million).
The Guardian has hatched a number of unique initiatives in an attempt to support its news business.
Guardian US launched a fundraising campaign in June to raise $50,000 to finance “This Land Is Your Land,” an editorial series focused on the American government’s attempt to sell public lands.
Last year, the online site began asking its readers in a blurb beneath most articles to sign up for a membership or contribute any amount to the site in a one-time payment. (Guardian US does not have a paywall.)
These programs now account for a “significant” portion of Guardian US’ revenue.