Huffington Post Nabs $25 Million in Funding–Here's a BoomTown Interview With Oak Investment's Fred Harman
The Huffington Post will announce this morning that it has raised $25 million, in a single investment from Oak Investment Partners.
The large round by Oak, which was led by Palo Alto, Calif.-based venture capitalist Fred Harman, will give the popular online news and blog site a valuation of just “south of $100 million,” a source said.
The new funding, the Huffington Post’s third, will be used for expansion of its offerings and the hiring of editorial and business talent.
“There is an inevitable shift from offline to online with people increasingly getting their news media online, and this election proved how powerful the Huffington Post could be,” said Harman (pictured here), in an interview with BoomTown. “And I think the post-election perception of the Huffington Post has changed in the eyes of advertisers to being a key mainstream news site.”
Indeed, the Huffington Post–which is now billing itself as ‘”The Internet Newspaper”–has been hitting on all cylinders during the current election season.
And it hopes to continue building that momentum into the Obama administration, which will give the liberal-leaning site a lot of advantages in coverage.
The Huffington Post has also become a powerful news aggregator, much as the more conservative Drudge Report has, sending traffic all over the Web from its site by linking with a variety of online sites. It also has a strong offering of high-profile bloggers.
But the site’s leaders are also hoping its traffic strength will allow it to be as strong in arenas outside of its flagship political arena, including in business, local, “green” and investigative news.
It will also use the money to make acquisitions, the company said in a press release about the funding, which it put out this morning.
It’s certainly a long way from May of 2005, when its high-profile co-founder, Arianna Huffington, was roundly mocked for launching the site. Today, she has seen her power grow as the site’s traffic and influence have.
The site’s namesake operates out of her California-based office in Los Angeles, while the company has its HQ in New York.
The Huffington Post’s traffic in September 2008, for example, quadrupled from a year before to 4.5 million unique visitors, according to comScore (SCOR). That performance made it the No. 1 “stand-alone political blog and news site,” besting Drudge.
“The cycle of print media is accelerating downward and there are not as many companies with a balance sheet and focus to do it right online,” said Harman, who will join the Huffington Post’s board. “The news market is really up for grabs in a lot of ways…and it is a good time for those who are viewed as authoritative.”
But, like a lot of advertising-reliant businesses, the Huffington Post is also facing a tough market and must show it can compete under more dire economic circumstances and build a sustained and profitable business.
This slug of money should give it a lot of room to do so, said Harman, who has invested in several digital media companies, such as Demand Media and Federated Media. He was also one of the lead investors in aQuantive, the digital advertising business that was bought by Microsoft for $6 billion in 2007.
“Who knows how deep this economic situation is going to be,” said Harman, who noted that he and others kept investing in aQuantive through the last Web downturn. “But strong companies that keep investing through a bad cycle can emerge as winners.”
Previous investments in the Huffington Post have totaled about $12 million. That funding has come from Softbank Capital and Greycroft Partners, as well as seed money from co-founder Kenneth Lerer and former AOL exec Bob Pittman.
Funding reports about the Huffington Post appeared about a week ago in the Times of London, with the post claiming a $15 million investment and expansion into investigative and local news.
But the most detailed posts were done by paidContent, which was the first to name Oak as the new investor and said the round was $20 million.