Vice Raises $450 Million as VC-Backed Youth Media Plans IPO

Shane Smith of Vice (Dan Steinberg/Invision for the Television Academy/AP Images)
Dan Steinberg/Invision for the Television Academy/AP Images

Vice Media raised $450 million of pre-IPO capital at a $5.7 billion valuation from the same private equity firm that has interests in Airbnb and Spotify and owns the CAA talent agency.

Vice Media was co-founded by Shane Smith, Suroosh Alvi, and Gavin McInnes. It launched as The Voice of Montreal in 1994 as a monthly magazine focused on art and culture news, and was partially funded by the Canadian government. But after a dispute with their traditionalist publisher, the founders changed the name to Vice and adopted an edgy youth focus, with a liberal approach to topics involving sex, drugs and punk rock music.

Twenty-three-years later and relocated to Brooklyn, Vice Media has formed multi-year partnerships with top tier entertainment and social media players including deals with Verizon Cellularm for existing and exclusive video; A&E Networks mfor a 24-hour youth lifestyle TV channel called Viceland; Disney, for a Vice Channel; HBO, for the Emmy Award-winning Vice on HBO; and Snapchat, to push video and millennial-focused news through the company’s Discover feature.

Vice also owns a marketing agency, a record label, a clothing line and operations in more than 35 countries. Licensing of original TV content to domestic and international networks has reportedly helped the company increase its profit margins dramatically.

Vice Media had already picked up over $1 billion in venture cash before TPG Capital, formerly known a Texas Pacific Group, made its $450 million follow-on investment at a $1.3 billion marked-up valuation. TPG manages $75 billion in venture capital and private equity investments, including a majority stake in the CAA talent agency, an interest in STX Entertainment, and stakes in wildly successful startups including Spotify and Airbnb.

Vice Media spurted ahead in 2016, just as promising media properties including International Business Times, The Daily Dot, Mashable, and the UK Guardian were forced to lay off employees, according to Vanity Fair’s Hive website.

ComScore’s latest Insight Ranking for both desktop and mobile Digital Media rated Vice Media as the 39th most popular multi-platform property, with 68.8 million unique visitors in April, just 20 percent behind Fox and only 10 percent fewer than Netflix.

In a widely-quoted statement, CEO Shane Smith commented: “This will allow us to: build up the largest millennial video library in the world – enabling VICE to widen our offering to include; news, food, music, fashion, art, travel, gaming, lifestyle, scripted and feature films. Building out this wide ranging and rich library of gold standard content will be an essential component of our future Direct to Consumer tech stacks and our innovations in transactional relationships – all of which represent the future of media.”

Vice Media intends to roll the TPG cash into launching Vice Studios to expand its scripted content. Vice has already acquired a majority stake in U.K.’s Pulse Films to launch documentaries, news and unscripted programming.

Smith told TechCrunch that Vice Media will also be funding over-the-top content to potentially build a subscription offering service. He claims that the company will be delivering content in 80 countries by early 2018.

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