Smartnews Raises $230 Million at $2 Billion Valuation

SmartNews Secures $230 Million in Series F Funding

SmartNews, the news aggregation platform based in Tokyo, has announced the successful completion of a $230 million Series F funding round. This investment elevates the company’s total funding to over $400 million and establishes its valuation at $2 billion, a milestone the company playfully refers to as becoming a “double unicorn.”

Investment Details

The funding round saw participation from new U.S. investors, including Princeville Capital and Woodline Partners. Additional support came from JIC Venture Growth Investments, Green Co-Invest Investment, and Yamauchi-No.10 Family Office in Japan. Existing investors, such as ACA Investments and SMBC Venture Capital, also contributed to this round.

Company Background and Growth

Established in Japan in 2012, SmartNews expanded its operations to the U.S. in 2014. The company significantly broadened its coverage of local news sources last year. While employing a team of experienced journalists, SmartNews leverages machine learning to curate personalized news feeds for its users.

A key feature distinguishing SmartNews is its commitment to breaking down “filter bubbles” through the “News From All Sides” functionality. This allows users to access news reporting from diverse political viewpoints.

New Product Development

SmartNews has proactively developed tools providing crucial information, such as its COVID-19 vaccine dashboard and U.S. election dashboard. The company intends to utilize the new funding to enhance its offerings for U.S. users, with a focus on consumer health and safety.

Upcoming features, planned for release in the coming months, will include tracking tools for wildfires and comprehensive crime and safety reports. A hurricane tracker has also been recently launched.

Business Model and Revenue Generation

The company’s primary revenue stream is derived from advertising. SmartNews operates on the premise that the majority of Americans – approximately 85-90% – do not subscribe to paid news services, yet still deserve access to high-quality information.

SmartNews maintains partnerships with over 3,000 global publishing organizations, making their content accessible through its web and mobile platforms.

Advertising and the SmartView Feature

Revenue is generated through the sale of inline and video advertisements, with proceeds shared with publishing partners. Over 75% of these partners utilize the “SmartView” feature, a quick-reading mode similar in concept to Google AMP.

SmartView enables users to rapidly load and read articles, even offline. The company asserts that these mobile-optimized stories, identified by a lightning bolt icon, drive increased user engagement and are prioritized by its algorithm, resulting in greater visibility for publishers.

Prominent brands like USA Today, ABC, and HuffPost are among the partners leveraging SmartView. Currently, over 70% of all pageviews on SmartNews originate from SmartView content.

User Engagement and Growth Metrics

The SmartNews app demonstrates strong user retention. According to App Annie data from July 2021, average monthly time spent per user on U.S. mobile devices is higher for SmartNews than for Google News and Apple News combined.

news aggregator smartnews raises $230 million, valuing its business at $2 billion

While the company has not disclosed its current monthly active user (MAU) count, it reported 20 million MAUs in the U.S. and Japan in 2019. The company now states that its U.S. MAUs have doubled in the past year.

Apptopia data indicates that the SmartNews app has accumulated approximately 85 million downloads since its launch in October 2014, with 14 million downloads occurring in the last 365 days. Japan represents the largest market for downloads, accounting for 59% of the total.

Future Plans and Leadership Statement

“This latest round of funding further affirms the strength of our mission, and fuels our drive to expand our presence and launch features that specifically appeal to users and publishers in the United States,” stated Ken Suzuki, co-founder and CEO of SmartNews.

He added, “Our investors both in the U.S. and globally acknowledge the tremendous growth potential and value of SmartNews’s efforts to democratize access to information and create an ecosystem that benefits consumers, publishers and advertisers.”

Expansion and Potential IPO

The newly acquired funds will be allocated to further U.S. expansion and team growth. Since its previous funding round in 2019, when it achieved unicorn status, the company has more than doubled its workforce to approximately 500 employees globally. Plans are underway to double the U.S. team to 100, with new hires across engineering, product development, and leadership positions.

Reports from The Wall Street Journal suggest that SmartNews is considering an initial public offering (IPO), though the company has declined to comment on these speculations.