• by April 23, 2019

Bryan Goldberg, the deal-hungry founder-CEO of Bustle Digital Group, said valuations for digital media companies likely will recover in 2020 as private-equity firms hunt for deals after a year of retrenchment.

“It’s a broken market. Not just in terms of prices we’re getting on assets — it’s a broken market in terms of just sort of a liquidity crisis,” he said in an interview with Ken Doctor in the Nieman Journalism Lab at Harvard. “Another 12 months and then people are going to start to enter. You’re going to see private-equity enter.”

As publishers slashed costs and fired workers, Bustle swooped in to buy properties like Mic, Gawker and The Outline to expand beyond its niche in women’s content. Goldberg looks for media properties that can help amortize the company’s investments in technology and infrastructure, while keeping costs in line.

Goldberg doesn’t see a more established publisher like Meredith as a potential buyer of Bustle, even as both companies target the women’s audience.

“If they wanted to buy us, they’d have to pay a growth multiple, because we’re growing really fast,” Goldberg said. “I just don’t think they’re in a growth mind. They’re sort of in an annuity mind.”

Bustle also is compared with Vox Media, whose brands include The Verge, Vox, SB Nation, Eater, Polygon, Curbed and Recode. Vox last year closedRacked, a retail and shopping website that covered style.

Goldberg sees Bustle’s focus on fashion and beauty as a key differentiator from Vox Media. Those categories are also popular in social-media apps, especially Facebook-owned Instagram, which has about 1 billion users worldwide.

Bustle works to make its ad offerings distinct from Facebook and Google’s, although investors don’t always appreciate those differences the way fashion advertisers do, Goldberg said. Brands like Gucci are looking for interesting, engaging and contextual ads.

He said Bustle aims to keep financial metrics like revenue-per-employee at more than $400,000 to be profitable. The company also relies on freelancers paid competitively, although that may mean living outside Manhattan.

“We’ve built a pretty big bunch of freelancers who are paid competitively — they just have to be in places where those rates are more than livable,” he said.