Quartz is on the block again just two years after a Japanese news aggregation and media company agreed to buy the struggling financial news site from Atlantic Media.
At the time of the July 2018 sale, the sale price for the cash and stock deal was pegged at up to $110 million — depending on revenue over the next year. The Wall Street Journal, which first reported the site was on the block again, said Tokyo-based Uzabase ultimately ended up paying $86 million as sales sagged.
Quartz declined to comment on the report. The company has been under intense pressure as the advertising market evaporated with the onslaught of the coronavirus pandemic.
Even before the pandemic, pressure was mounting on the eight-year-old financial news operation. In May 2019, the company imposed deep cuts, laying off 80 people, or 40 percent of its staff, after it said business dropped by 54 percent during the first quarter of that year. The editorial staff at that time was reduced to 50 people from 85.
In its most recent earnings report, the company said that its revenue from Quartz plunged to $5 million in the first half of 2020 from $11.6 million a year earlier. Due to the May 2019 cuts, the loss from Quartz was $11.2 million in the first half of 2020, down from the $13 million in the first half of 2019.
Yusuke Umeda, Uzabase’s founder and co-chief executive, said at the time of the 2018 acquisition he saw the deal as a path to give the company a foothold in the US. It also expanded Quartz footprint overseas with Quartz India and Quartz Asia and launched a paid subscription business. But conversion to a paid subscription model has been slow. In August, it reported only 21,000 paid subscribers at $99 a year, or $2.1 million in revenue.
“I think it will sell, but it will be viewed as a distressed asset sale,” said Reed Phillips, CEO of investment bank Oaklins DeSilva + Phillips, which is not connected to the sale process. “There are buyers out there with digital assets, but they’d probably want to make more staff cuts,” he said. Many private equity players are looking at the current market as a chance to pick up digital assets at much lower prices than a year ago.