Playbuzz, a software company that aims to help publishers create content for the “Snapchat generation,” has raised $35 million (£25 million) in a new funding round.
The round brings total investment in the Israeli-founded company to $66 million (£49.1 million) and values the business at almost $250 million (£185 million), according to a Business Insider source.
Playbuzz, which employs around 170 people across seven offices in New York, London, Tel Aviv, Hamburg, São Paulo, Moscow, and LA, said it will use the new funding to expand its global footprint.
Founded in 2012 by Shaul Olmert and Tom Pachys, Playbuzz has developed a platform that 13,000 publishers and brands use today to create “fun” and “engaging” content. The company claims that content in its network reaches hundreds of millions of people every month.
“We create new forms of content that are more exciting and more consumable,” CEO Olmert told Business Insider in an interview in July. “We make content more visual and more interactive and more snackable,” he continued, adding that Playbuzz is being used by The Huffington Post, Time Magazine, the BBC, Sky News, and lots of other “very traditional media outlets”.
“My 13-year-old daughter has never read an article in their life,” said Olmert. “I feel like authors should adapt their tactics.”
During the US presidential elections, Playbuzz was used by the Donald Trump and Hilary Clinton campaigns, as well as by the news outlets reporting on them. Olmert said: “Instead of reading boring analysis in long form format, you had: ‘Who said it, Donald Trump or Homer Simpson?'”
Playbuzz gives companies the toolset to be relevant and communicate with the Snapchat generation in a way they can digest, according to Olmert.
“Publishers are dying and users don’t care about content but here’s the solution” said Olmert, who happens to be the third son of former Israeli Prime Minister Ehud Olmert.
He added: “It’s in a bunch of different languages and the engagement rates are huge. If you measure how many people complete the entire article and what’s the time spent on an article, it’s far better [for Playbuzz] than a traditional piece of content.”
But he admits that Playbuzz might not be for every publisher out there all the time. “I don’t expect people to use Playbuzz 100% of the time. 10% is good.”
Playbuzz is allowing publishers to use its platform for free but advertising companies and brands must pay a fee.
“Most publishers are losing a lot of money so being a cost item for them is not the best idea,” said Olmert. “We are completely free to publishers but then we go to advertisers … and then we charge them per distribution and we charge insanely high rates.”
Advertisers using Playbuzz include Unilever, Netflix, and Coca Cola, according to Olmert.
Playbuzz makes branded content (or advertorial) for brands like Lloyds and then tries to get it placed on media websites. Lloyds will pay Playbuzz a fee in exchange.
“We’ll share revenues [with media titles] that would be far superior to what they make on other forms of advertisers and get a decent cut of it ourselves,” said Olmert. “Everybody’s happy because advertiser gets real engagement. The publisher gets real dollars without having to bombard people with overlays and all those annoying forms of ads.”
Playbuzz’s revenues are set to triple to around $50 million (£37 million) in 2017, according to a Business Insider source with knowledge of the company.
“We’re not Google yet but it’s coming together,” said Olmert.
Investors in the series C funding round include children’s media company Disney, private equity fund Saban Ventures, venture capital firms 83 North and Carmel Ventures, and angel investor Oded Vardi, who is the son of Israeli tech icon Yossi Vardi.
Harel Beit-On, founder and general partner of Viola Growth, and a new member on Playbuzz’s board of directors, said in a statement:
“As Playbuzz continues to grow, it will increasingly become a strategic partner for brands and publishers, all of whom must speak the language of modern consumers. The Playbuzz platform enables them to do just that, translating their content to meet the needs of today’s readers.
“Playbuzz’s innovative storytelling tools continue to drive the future of content creation and ensure publishers and brands’ stories are heard. We believe in the company’s excellent management team – with its strong creativity and operational skills – and are excited to join them as they enter this exciting phase.”