SmartNews, a Tokyo-headquartered news aggregation website and app that’s grown in popularity despite hefty competition from built-in aggregators like Apple News, announced it has closed on $230 million in Series F funding. The round brings SmartNews’ total raised to over $400 million and values the business at $2 billion — or, as the company touts in its press release, a “double unicorn.” (Ha!) The funding included new U.S. investors Princeville Capital and Woodline Partners, JIC Venture Growth Investments, Green Co-Invest Investment, and the Yamauchi-No.10 Family Office in Japan. Existing investors participating in this round included ACA Investments and SMBC Venture Capital.
Founded in 2012 in Japan, the company launched in the U.S. in 2014 and expanded its local news footprint early last year. At the same time, the app’s content team includes former journalists and machine learning picks which article readers can use to personalize their experience. However, one of the app’s key differentiators is how it pops users’ “filter bubbles” through its “News From All Sides” feature, allowing users to access news from various political perspectives.
With the additional funds, the company plans to develop more features for its U.S. audience — one of its largest, in addition to Japan — focusing on consumer health and safety. It has also created new products, like its COVID-19 vaccine dashboard and U.S. election dashboard, that provide critical information at a glance. These will roll out in the next few months, including tracking wildfires and crime and safety reports. It also recently launched a hurricane tracker.
SmartNews has relationships with more than 3,000 global publishing partners whose content is available through its web and mobile devices service. The aggregator’s business model primarily focuses on advertising; as the company has said, 85-90% of Americans aren’t paying to subscribe to news. However, SmartNews believes these news consumers still have a right to access quality information.
The company sells inline ads and video ads to generate revenue, where revenue is shared with publishers. Over 75% of its publishing partners also use its “SmartView” feature. This is the app’s quick-reading mode, an alternative to Google AMP. Here, users can quickly load an article to read, even offline. The company promises publishers that these mobile-friendly stories, marked with a lightning bolt icon in the app, deliver higher engagement — and its algorithm rewards that type of content, bringing them more readers. Among SmartView partners are well-known brands like USA Today, ABC, HuffPost, and others. Over 70% of all SmartNews page views come from SmartView first.
SmartNews’ app has proven to be very sticky in attracting and keeping users’ attention. The company tells us, citing App Annie July 2021 data, that it sees an average monthly spending per user on U.S. mobile devices higher than Google News or Apple News combined. The company declined to share its monthly active users (MAUs) but said in 2019, it had grown to 20 million in the U.S. and Japan. Today, it says its U.S. MAUs doubled over the last year. According to Apptopia’s data, the SmartNews app has seen around 85 million downloads since its October 2014 launch and 14 million of those took place in the past 365 days. The firm noted that Japan is the largest install market, accounting for 59% of lifetime downloads.
“This latest round of funding further affirms the strength of our mission and fuels our drive to expand our presence and launch features that specifically appeal to users and publishers in the United States,” said SmartNews co-founder and CEO Ken Suzuki. “Our investors both in the U.S. and globally acknowledge the tremendous growth potential and value of SmartNews’s efforts to democratize access to information and create an ecosystem that benefits consumers, publishers, and advertisers,” he added.
The Wall Street Journal reports SmartNews is exploring an IPO, but the company declined to comment. The company says the new funds will be used to invest in further U.S. growth and expand the company’s team. Since its last fundraiser in 2019, it became a unicorn; the company has more than doubled its headcount to approximately 500 people globally. It now plans to double its headcount of 100 in the U.S., with additions across engineering, product, and leadership roles. The SmartNews app is available on iOS and Android in over 150 countries.
