It turns out content and commerce can be a valuable mix.
NBCUniversal spent around $230 million to buy the video tutorial site Craftsy
Put one in the win column for content + commerce.
Craftsy.com
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
Earlier this week, NBCUniversal announced the acquisition of Craftsy, a Denver-based startup that sells videos of crafts classes, as well as craft supplies and kits.
The media giant didn’t disclose the price, but sources have told Recode that NBCU paid around $230 million in cash for the seven-year-old website. A few Craftsy executives can earn a bonus on top if they stay with the company for four years.
Craftsy had revenue of between $60 million and $65 million in 2016, according to multiple sources, and was around break-even. The company makes about half of its money from the sale of online video classes like “Knit Faster with Portuguese Knitting” and “How to Master Outdoor Cooking,” and the other half from e-commerce sales of craft supplies and kits, according to one of these people.
An NBCU spokesperson declined to comment. Craftsy CEO John Levisay did not respond to a request for comment.
When the deal was announced this week, NBCUniversal Cable Chairman Bonnie Hammer wrote to her staff, saying, “Just as Universal Cable Productions and Wilshire Studios develop and produce content for our networks and other outlets, Craftsy’s lifestyle learning studios supply content for its own branded online network. And we believe that the interests and passions of our shared audiences naturally align.”
The acquisition is the latest digital deal for NBCU, which has invested $400 million into BuzzFeed and $200 million in Vox Media, which owns this site. The media company also invested $500 million into Snapchat parent company, Snap, at its IPO.
Sources say the outcome was a good one for Craftsy’s early investors like Tiger Global and Harrison Metal. But not as good for some of the startup’s later investors, who will likely only get back the money they invested because the sale price was lower than the company’s last private valuation.
Craftsy had raised more than $100 million from investors, including Stripes Group and Adams Street Partners.
Axios first reported the deal price in Dan Primack’s Pro Rata e-mail newsletter on Friday.
This article originally appeared on Recode.net.
