Update (2:23) I called and emailed Alex Muse, one of the ViewMarket guys. He says, via email, that the $15 million figure didn’t come from him, that it’s his understanding the reporter got it from CultureMap’s lawyer. “I think we’ve got 30 full-time employees,” he says. “ViewMarket purchased the company using its stock, and part of the deal included ViewMarket putting money on the combined balance sheet, hence the mezzanine debt from MCP. The combined company is EBITDA positive — i.e. profitable — the mezz provides working capital.”
Original item: Last night the Dallas Business Journal posted the news that Dallas-based ViewMarket (formerly called Haul) had acquired Houston-based CultureMap, which has outposts in Houston, Austin, and here in Dallas. The story was headlined: “ViewMarket Buys CultureMap in Deal Valued at $15M.” Who says it’s a $15 million deal? And using what metrics? The story doesn’t offer that information. The $15 million figure is only used in the headline. The story does report that the ViewMarket people say CultureMap currently generates $4 million in revenue and that it had $1.4 million of debt when they acquired it. All this information was contained, by the way, in a ViewMarket press release that was crafted as an FAQ (see below for full text).
I’m skeptical. I was a liberal arts major, though. So what the heck do I know? But I look at $1.4 million of debt with $4 million in revenue, and then I count on CultureMap’s payroll at least 25 employees. Then I see that ViewMarket describes itself like this: “You can think of ViewMarket as a combination of VOX Media (raised $107M) and Maker Studios (acquired by Disney for $900M).” And my reaction is kind of like this:
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(Full disclosure: I once worked at an underfunded magazine that was owned by Bob Bennett, one of the ViewMarket honchos. And there is more than one former D Mag staffer who now works at CultureMap.)
ViewMarket / CultureMap FAQ
Why did ViewMarket buy CultureMap?
Last year we received several opportunities to roll our video creator’s content out on a national basis; however, we realized we needed a platform to enable the rollout. It was a build or buy situation and around that same time we were introduced to the CultureMap team and by October we entered into an agreement to acquire the company. CultureMap’s business and technology platform will enable ViewMarket to launch and monetize our video products faster and more efficiently.
Why buy and instead of build?
First and foremost, over the past five years CultureMap has done an amazing job of creating a consumer-facing brand throughout Texas. Leveraging their brand from the start will give ViewMarket a distinct time-to-market advantage. CultureMap’s readers are youthful, affluent and influential. While they love CultureMap’s print product they are voracious consumers of mobile and video content – the perfect audience for ViewMarket’s video and mobile content. Additionally, CultureMap has a strong multi-city sales organization with strong client relationships with both national and local brands like Cadillac and Ebby Halliday. Finally, CultureMap’s technology delivery platform provides the needed resources to allow ViewMarket to grow nationally in a very short timeframe.
What will change at CultureMap?
To start we are injecting capital into the combined company to facilitate various initiatives. We have already added one new salesperson in Austin and plan to add additional sales resources in Houston, Dallas and San Antonio. In the coming weeks we will launch a mobile version of CultureMap with a focus on maps and videos focusing on WHERE to eat, shop and stay. Finally, we will be launching a CultureMap branded television channel broadcast live online, via OTT (Roku) and eventually on local broadcast television.
How will CultureMap be integrated into ViewMarket?
In general CultureMap will continue to operate as usual; however, ViewMarket’s head of programming will work closely with Jennifer and the editorial team for all CultureMap branded video properties. Otherwise, ViewMarket will continue to deliver branded and non-branded pro-sumer generated video content to our partners. Finally, Chad Miller’s sales organization will take over all sales efforts for ViewMarket and CultureMap.
What will the combined company be called?
We are calling the company ViewMarket Inc. and CultureMap will be our consumer facing brand as we rollout nationally.
What is the business of ViewMarket?
ViewMarket is building a marketplace of high value online and broadcast viewers leveraging video, mobile and online print.
Where will the company be based?
The combined ViewMarket and CultureMap business will continue to have offices and operate in Dallas, Houston, Austin and Santa Monica. We plan to launch San Antonio in short order.
What else has ViewMarket been doing besides this deal?
Last year we executed a partnership with Nexstar Broadcasting to deliver our pro-sumer created video content for their 90+ affiliate television stations around the country. The CultureMap transaction will hasten this effort to rollout our programming on a national basis. We’ve also continued to identify and secure relationships with more than 3,000 video content creators in various categories including fashion, food, travel and wellness.
How is the company funded?
The company has raised capital from various investors and family offices including:
Dave McClure, 500Startups
The founder and head of 500Startups ($125M Early Stage Fund). Dave was part of the original PayPal team. Previously he was with Founders Fund and lead the Facebook fbFund incubator program.Christine Tsai, 500 Startups
Christine was Dave’s founding partner. She was part of the original team that started YouTube and served as Product Marketing Manager for Google prior to joining 500 Startups.Will Bunker, Silicon Valley Growth Syndicate
Will co-founded match.com and served as the company’s president. In addition to match.com, he has co-founded and bootstrapped several internet businesses very synergistic to ViewMarket.Dave Matthews, VentureSpur (now REVTECH Accelerator)
Dave is founder of one of Dallas’ top early stage startup accelerators. He is also the managing partner of an early stage venture capital firm called Trailblazer Capital.To finance the transaction, the company raised mezzanine debt from Tom Montgomery’s Montgomery Capital Group. To date the company has raised $10.1M in equity and $1.4M in debt. The combined company is on track to generate more than $4M in revenue this year; however, with the addition of CultureMap’s platform we believe we can grow revenues to eight digits in the very near term.
Who are the peer group companies for ViewMarket?
You can think of ViewMarket as a combination of VOX Media (raised $107M) and Maker Studios (acquired by Disney for $900M).
Will you be raising money?
We are in the process of talking to tier one Silicon Valley venture capital firms to fund a growth round between $5-20M.
