Refinery29 ditches commerce, raising $20 million to double down on content
At the time, Refinery29 was in the early stages of executing on the strategy, in which the apparel its editors wrote about would be for sale to the 6 million women who visited its site each month. Co-CEO Philippe von Borries told me the company expected to generate a quarter of its revenue, or around $4 million, from commerce in 2012.
That prediction didn't pan out. Commerce has only made up around 5 percent of revenue. The other 95 percent comes from Refinery29's core business -- advertisements and "branded experiences," which is a type of native ad that the company produces in-house. Co-CEO Justin Stefano explains that commerce wasn't a failure -- the revenue mix didn't meet expectations because advertising actually outperformed expectations. In the meantime, Refinery29 has grown its audience to 11 million monthly uniques.
So, like any good startup, Refinery is doubling down on what's working and moving away from what's not. The commerce element will no longer be a focus. "It took us a couple of years to come to the conclusion that we could provide a better resource to users by focusing on discovery … versus getting caught up in the native transaction," von Borries says. Dealing with tedious things like inventory, transactions, and shipping is a lot less appealing when the other side of the business -- making content that readers and brands love -- comes more naturally.
Today Refinery29 announced a round of funding to go along with its newly refined focus. The company has raised $20 million in Series C funding from Stripes Group. That brings Refinery29's total funds raised to $30.4 million. This is a huge chunk of capital, and it follows a recent string of equally as massive fundraises by media companies.
Refinery29 plans to invest a big portion of its capital into editorial, expanding its areas of coverage to lifestyle categories beyond its fashion roots. The site is known for its highly clickable slideslows and service-style writing on topics like "33 ways to wear Fall's trendiest boots." Refinery29 often shoots its own photos for popular features like hair and nail tutorials.
But in the last year, Refinery29's edit team has experimented with content around home, beauty, food, and wellness, as well as meatier topics like relationships, politics, and career. Turns out, readers were hungry for that content, too. "Fashion and shopping is our foundation but we discovered fairly quickly … that it's really the voice and connection to our editors that our readers really love," says Christene Barberich, Refinery29's Editor-in-Chief. Articles like "The 411 on Obamacare and Birth Control," "The Great Porn Debate & Why It Should Change," and "How to Get Promoted Each Year" resonated with readers, she says.
Likewise, Refinery29 plans to invest in long-form content and essays, which Barberich says only strengthens the site's bond with readers. (Check out this one on why men are scared of women's periods, or this one on working out with Tracy Anderson.) Refinery29 recently hired Piper Weiss, an editor at Yahoo Shine, to lead the site into more original reporting as well. Lastly, Refinery29 has launched a contributor editor section which includes content from partners that match the spirit and tone of the site.
The company is on the prowl for acquisitions of smaller media brands, too. "There are some very meaningful voices out there and amazing brands that have been built that really speak to specific verticals with a strong voice," Stefano says. Refinery29 is interested in snapping those up. (Refinery29 acquired mobile platform Socialbomb in May.)
The decision to double down on content is a sign of the times. Refinery29's fundraise follows an even bigger raise from its fellow NYC media startup, Vox Media. The parent of The Verge and SB Nation closed on $36 million of a $40 million round, bringing its total funds raised to an eye-popping $80 million. BuzzFeed has turned profitable after raising $46.3 million. Business Insider raised $18.6 million. Vice Media is worth $1.4 billion.
Based on investment dollars alone, these companies are reaping the spoils of a content renaissance. Stefano attributes the renewed interest from VC's to shortcomings in commerce deals over the last six or seven years, many of which have not delivered on their frothy valuations. "There is a major moment happening in media right now," he says. "There's never been a better time for media companies to raise money."