, the Japanese maker
of a news-discovery app, this week said its latest fundraising effort valued the company at about $2 billion. That valuation likely reflects its positioning as a technology company rather than a news
publisher, though direct comparisons are difficult without more financial disclosures.
Such transparency will come when SmartNews fulfills its aspiration to become a public company, as a
report in The Wall Street Journal suggested, citing people familiar with the
SmartNews raised $230 million in its latest round of funding from investors including Princeville Capital, Woodline Partners, JIC Venture Growth Investments and Green
Co-Invest Investment. Since its founding in 2012, SmartNews has raised $400 million to help fuel its expansion into the U.S., the world’s biggest advertising market.
It’s interesting that SmartNews has such a significant valuation, considering that aggregating news doesn’t add much value to the process of news gathering. Almost anyone can license,
summarize or provide hypertext links to the original work of a news publisher. Tech companies including Apple, Facebook, Google and Microsoft all aggregate news.
market doesn’t award valuations to companies based on labor intensity. Gannett, the biggest U.S. newspaper publisher by daily circulation, employs thousands of journalists. Its market value is
currently about $932 million – or less than half of what SmartNews is worth.
SmartNews differentiates its platform by personalizing the experience for the reader based
on their interests, and by providing a “News From All Sides” feature that urges readers to avoid limiting themselves to content that reinforces their preexisting biases.
By harvesting data about its millions of users, SmartNews presumably can boost the prices of its advertising inventory by reaching target audiences. The company’s first-party data can be a
source of value growth for years to come.