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News aggregator SmartNews raises $230 million, valuing its business at $2 billion
SmartNews, a Tokyo-headquartered news aggregation website and app that’s grown in popularity despite hefty competition from built-in aggregators like Apple News, today announced it has closed on $230 million in Series F funding. The round brings SmartNews’ total raise to date to over $400 million and values the business at $2 billion — or as the company touts in its press release, a “double unicorn.” (Ha!)
The funding included new U.S. investors Princeville Capital and Woodline Partners, as well as JIC Venture Growth Investments, Green Co-Invest Investment, and Yamauchi-No.10 Family Office in Japan. Existing investors participating in this round included ACA Investments and SMBC Venture Capital.
Founded in 2012 in Japan, the company launched to the U.S. in 2014 and expanded its local news footprint early last year. While the app’s content team includes former journalists, machine learning is used to pick which articles are shown to readers to personalize their experience. However, one of the app’s key differentiators is how it works to pop users’ “filter bubbles” through its “News From All Sides” feature, which allows its users to access news from across a range of political perspectives.
It has also developed new products, like its COVID-19 vaccine dashboard and U.S. election dashboard, that provide critical information at a glance. With the additional funds, the company says it plans to develop more features for its U.S. audience — one of its largest, in addition to Japan — that will focus on consumer health and safety. These will roll out in the next few months and will include features for tracking wildfires and crime and safety reports. It also recently launched a hurricane tracker.
The aggregator’s business model is largely focused on advertising, as the company has said before that 85-90% of Americans aren’t paying to subscribe to news. But SmartNews’ belief is that these news consumers still have a right to access quality information.
In total, SmartNews has relationships with more than 3,000 global publishing partners whose content is available through its service on the web and mobile devices.
To generate revenue, the company sells inline ads and video ads, where revenue is shared with publishers. Over 75% of its publishing partners also take advantage of its “SmartView” feature. This is the app’s quick-reading mode, an alternative to something like Google AMP. Here, users can quickly load an article to read, even if they’re offline. The company promises publishers that these mobile-friendly stories, which are marked with a lightning bolt icon in the app, deliver higher engagement — and its algorithm rewards that type of content, bringing them more readers. Among SmartView partners are well-known brands like USA Today, ABC, HuffPost and others. Currently, over 70% of all SmartNews’ pageviews are coming from SmartView first.
SmartNews’ app has proven to be very sticky, in terms of attracting and keeping users’ attention. The company tells us, citing App Annie July 2021 data, that it sees an average time spent per user per month on U.S. mobile devices that’s higher than Google News or Apple News combined.
Image Credits: App Annie data provided by SmartNews
The company declined to share its monthly active users (MAUs), but had said in 2019 it had grown to 20 million in the U.S. and Japan. Today, it says its U.S. MAUs doubled over the last year.
According to data provided to us by Apptopia, the SmartNews app has seen around 85 million downloads since its October 2014 launch, and 14 million of those took place in the past 365 days. Japan is the largest market for installs, accounting for 59% of lifetime downloads, the firm noted.
“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,” said SmartNews co-founder and CEO Ken Suzuki. “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,” he added.
The company says the new funds will be used to invest in further U.S. growth and expanding the company’s team. Since its last fundraise in 2019, where it became a unicorn, the company more than doubled its headcount to approximately 500 people globally. it now plans to double its headcount of 100 in the U.S., with additions across engineering, product, and leadership roles.
The Wall Street Journal reports SmartNews is exploring an IPO, but the company declined to comment on this.
The SmartNews app is available on iOS and Android across more than 150 countries worldwide.
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SmartNews raises $92M at a $1.2B valuation
Looks like there’s still money to be made in news aggregation — at least according to the investors backing the news app SmartNews.
The company is announcing the close of a $92 million round of funding at a valuation of $1.2 billion. The funding was led by Japan Post Capital Co. and ACA Investments, with participation from Globis Capital Partners Co., Dentsu and D.A. Consortium.
This includes the $28 million that SmartNews announced in August, and it brings the startup’s total funding to $182 million.
News aggregation apps seemed to everywhere a few years ago, and while they haven’t exactly disappeared, they didn’t turn into unicorns, with many of them acquired or shut down.
However, Vice President of U.S. Marketing Fabien-Pierre Nicolas told me that SmartNews has a few unique advantages. For one thing, it uses machine learning rather than human curation to “thoughtfully generate a news discovery experience” that’s personalized to each user.
Secondly, he said that many news aggregators treat the publishers creating the content that they rely on “like a commodity,” whereas SmartNews treats them as “true partners.” For example, it’s working with select publishers like Business Insider, Bloomberg, BuzzFeed and Reuters on a program called SmartView First, where articles are presented in a custom format that gives publishers more revenue opportunities and better analytics.
Lastly, he said SmartNews has focused on only two key markets — Japan (where the company started) and the United States. And it sounds like one of the main goals with the new funding is to continue growing in the United States.
Nicolas also suggested that there are some broader trends that SmartNews is taking advantage of, like the fact that the shift to mobile news consumption is still underway, particularly for older readers.
And then there’s “the loss of trust in some news sources — political news, especially,” which makes SmartNews’ curated approach seem more valuable. (It also recently launched a News From All Sides feature to show coverage from different political perspectives.)
As for monetization, he said SmartNews remains focused on advertising.
Yes, there’s a growing interest in subscriptions and paywalls, which is also reflected in subscription news aggregators like Apple’s News+, but Nicolas said, “Eighty-five to ninety percent of Americans are not subscribing to news media. We believe those 85 to 90 percent have a right to have quality information as well.”
Update: Also worth noting is that SensorTower says SmartNews has been downloaded 45 million times since the beginning of 2014, with 11 million of those downloads in 2019.
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SmartNews’ head of product on how the news discovery app wants to free readers from filter bubbles
Since launching in the United States five years ago, SmartNews, the news aggregation app that recently hit unicorn status, has quietly built a reputation for presenting reliable information from a wide range of publishers. The company straddles two very different markets: the U.S. and its home country of Japan, where it is one of the leading news apps.
SmartNews wants readers to see it as a way to break out of their filter bubbles, says Jeannie Yang, its senior vice president of product, especially as the American presidential election heats up. For example, it recently launched a feature, called “News From All Sides,” that lets people see how media outlets from across the political spectrum are covering a specific topic.
The app is driven by machine-learning algorithms, but it also has an editorial team led by Rich Jaroslovsky, the first managing editor of WSJ.com and founder of the Online News Association. One of SmartNews’ goal is to surface news that its users might not seek out on their own, but it must balance that with audience retention in a market that is crowded with many ways to consume content online, including competing news aggregation apps, Facebook and Google Search.
In a wide-ranging interview with Extra Crunch, Yang talked about SmartNews’ place in the media ecosystem, creating recommendation algorithms that don’t reinforce biases, the difference between its Japanese and American users and the challenges of presenting political news in a highly polarized environment.
Catherine Shu: One of the reasons why SmartNews is interesting is because there are a lot of news aggregation apps in America, but there hasn’t been one huge breakout app like SmartNews is in Japan or Toutiao in China. But at the same time, there are obviously a lot of issues in the publishing and news industry in the United States that a good dominant news app might be able to help, ranging from monetization to fake news.
Jeannie Yang: I think that’s definitely a challenge for everybody in the U.S. With SmartNews, we really want to see how we can help create a healthier media ecosystem and actually have publishers thrive as well. SmartNews has such respect for the publishers and the industry and we want to be good partners, but also really understand the challenges of the business model, as well as the challenges for users and thinking of how we can create a healthier ecosystem.
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SmartNews’ latest news discovery feature shows articles from across the political spectrum
Even before the 2016 election, political polarization was increasing, with Americans so entrenched in the news sources they rely on that the Pew Research Center said “liberals and conservatives inhabit different worlds.” Now SmartNews, the news aggregation app that recently hit unicorn funding status, wants to give users a way to step out of their bubbles with a feature called News From All Sides.
News From All Sides is an option located under the politics tab in SmartNews’ app. A slider at the bottom allows users to see articles about a specific news event sorted into five groups, ranging from most liberal to most conservative. Now available for new users in the United States, the feature will gradually roll out as the company fine-tunes it.
News From All Sides was created for readers who want to see other points of view, but might be overwhelmed by an online search, says Jeannie Yang, SmartNews’ senior vice president of product. It also aims to provide more transparency about news algorithms, which have been blamed for exacerbating political polarization.
Before developing the feature, the SmartNews team conducted research and focus groups in places including Minneapolis and cities in North Carolina to understand how people across the country consume political news online.
“We found that across the board, the last [presidential] election was not just a wake-up call about what news reporting is, but users also expressed that they are much, much more aware of algorithms running underneath what they see. They might not know how it works, but they know there is something else going on,” Yang says.
The political leanings of publications that appear in News From All Sides were categorized by SmartNews’ content team, which includes journalists who previously worked at The Wall Street Journal, Bloomberg, Fox News and other major news outlets. An AI-based algorithm decides which headlines appear in each category. As the feature goes through new iterations, Yang says SmartNews will make changes based on reader feedback. For example, future versions might look at the positions taken in specific articles and include more than five categories on the slider.
News From All Sides is an eye-opener along the lines of “Blue Feed, Red Feed,” an interactive feature (now archived) by The Wall Street Journal that demonstrated how much someone’s political leanings can influence what Facebook’s algorithms display on their News Feed.
Of course, there are many people who are content to be ensconced in their own news bubbles and may not be interested in News From All Sides, even with the upcoming presidential election. Features like it won’t fix political polarization, but for people who are curious about different points of view, even ones they strongly disagree with, News From All Sides gives them a simple way to explore more coverage.
“We definitely discussed that,” says Yang. “The feature is not initially targeted to everyone. It targets people who are more political news junkies, who are checking their phones for news multiple times a day and will actively seek out other sources, so they might go on Google News and go down a rabbit hole.”
“As more readers consider how they are going to vote, it will also help them with perspectives,” Yang adds. “It’s not something that will appeal to everyone broadly, but we hope that we will adjust a pain point for this core group and then iterate it to something more universal.”
SmartNews was founded in Japan, but the slider is currently only on its app for the U.S. because political polarization is a major issue there. Yang says the feature is one part of SmartNews’ goal to improve discovery in all news topics.
“Our mission is to break people out of filter bubbles and personalize discovery with the idea that recommendation algorithms can expand interests, instead of narrowing your interests,” she says. “We’re thinking of how to create more transparency and also expose readers to something they might not usually see, but present it in a fun way, like a serendipitous discovery.”
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News discovery app SmartNews nabs another $38M, now valued at $500M-$600M
As large platforms like Facebook and Apple position themselves as the new go-to places to read news, an independent app that started in Japan has landed a new round of funding to raise its own game. SmartNews — a news aggregation app that works with some 1,500 publications and selects stories for you based on your reading activity in the app — has raised another $38 million in… Read More
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Microsoft Launches A Bing-Powered News App For iOS Devices, News Pro
Microsoft today unveiled yet another application aimed at iOS users, with the launch of a news application that greatly resembles Apple’s own News application that comes built into iOS 9. Called “News Pro,” Microsoft’s app aims to offer readers a personalized experience by connecting them to articles that match their current interests, while also uncovering… Read More
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