• by Sara Guaglione , December 11, 2020

De Correspondent’s English language site, The Correspondent, is shutting down, after announcing in March that it would close its new U.S. office to concentrate on building its Amsterdam team to launch this fall.

The decision was made due to The Correspondent’s “financial situation,” De Correspondent cofounder Ernst-Jan Pfauth wrote in a memo sent to staff Thursday. 

Ten people will be let go. All published articles and audio stories will remain publicly accessible on the site. 

The ad-free, reader-funded, Netherlands-based news site raised $2.6 million from over 45,000 members in more than 130 countries to launch an English version of the Dutch site.

At first, it seemed the site would be based in New York. It later became clear the De Correspondent’s plan was to create an English-language site based in The Netherlands.

The Correspondent will shutter on December 31.

The company raised funding for a U.S. launch from Knight, Craig Newmark Philanthropies, and nearly $1 million from Omidyar Group’s Luminate, according to Nieman Lab reporting.

Pfauth's staff memo, which was obtained by Nieman Lab, discussed three worst-case scenarios, which all ended up happening at the same time in October: less than 30% of renewals with founding members, an increase of churn, and a lower average membership fee for The Correspondent. 

“We fell 3% short of our worst case-renewal target of 30%, due to failed payments," he wrote.

Churn was up to 25% for annual members, with many members citing financial hardship amid the COVID-19 pandemic.

The average membership fee that members pay was $52 (43 Euros), lower than the anticipated $85 (70 Euros).

This led to a projected loss of roughly $1 million (900,000 Euros) in 2021, against only about $1.2 million (1 million Euros) in revenue, Pfauth wrote. “To even just make ends meet, we would have to do 50% better than last year with half of the current team and resources."

Pfauth said they explored other options, such as continuing with a smaller team, cutting salaries and merging The Correspondent with De Correspondent, but none of these were “financially viable.”

“By doing this, we avoid bankruptcy, which would have been inevitable on the path that we were on, and would consequently leave less on the table for a proper compensation to the [The Correspondent] team and our members. The debts of SDM, Luminate and the founders will not be serviced," Pfauth wrote.