November 27, 2020

Business Insider Parent Nears Deal to Buy Controlling Stake in Morning Brew

Business Insider parent Insider Inc. is nearing a deal to acquire a controlling stake in Morning Brew, a news startup known for a popular email newsletter on business and finance, according to people familiar with the situation.

The terms the companies are discussing would value Morning Brew at over $75 million, including certain performance incentives, the people said. The companies haven’t completed a deal, and the talks could still fall apart.

The sale of Morning Brew is a bright spot in a digital-media sector that has faced a number of challenges. The online-ad market was already under pressure before the coronavirus pandemic exacerbated the situation.

Newsletters, including those operated by companies like Morning Brew, theSkimm and traditional media outlets, are viewed as attractive, partly because they can help companies expand the reach of their content and recruit new subscribers. Newsletters often command higher advertising rates than traditional display ads in news articles because they allow advertisers to reach engaged users directly in their email inboxes.

Morning Brew was founded in 2015 at the University of Michigan by Alex Lieberman and Austin Rief, who raised less than $1 million in capital to launch the startup. The company has nearly 3 million subscribers for its business newsletters. About 2.5 million people subscribe to its flagship daily newsletter, Morning Brew, which serves up pithy summaries of business and technology news.

Morning Brew is on pace to meet its revenue target of $20 million and is profitable, one of the people said. The company, which is aimed at young professionals, has signed up advertisers including Fidelity Investments Inc.,

Oracle Corp.

and sustainable footwear company AllBirds Inc.

Morning Brew also publishes a popular podcast, “Business Casual,” which has featured business newsmakers including former Google Chief Executive Eric Schmidt, Quibi Chief Executive Meg Whitman and Netflix co-Chief Executive Reed Hastings.

Insider Inc., which is owned by German media conglomerate

Axel Springer SE,

is looking to increase its investment in email newsletters to attract more readers to its news and entertainment platforms. The company isn’t planning to integrate Morning Brew with any of its other businesses, which include Business Insider, data firm eMarketer and Insider TV, one of the people familiar with the situation said.

Write to Benjamin Mullin at [email protected]

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