The Messenger founder Jimmy Finkelstein is looking for more cash from new and current investors to bail out the struggling news start-up, Axios reported Thursday, citing unnamed sources.
The report comes as the company, which launched in May with $50 million, moves to lay off nearly two dozen staffers this week across all departments. It’s a big step back from Finkelstein’s highly-touted plans to hire 550 journalists within its first year, with the goal of drawing 100 million monthly viewers.
The Messenger reached a total of about 300 staffers, but hiring slowed dramatically as 2023 wore on. In industry circles, the company became known for dangling jobs to multiple journalists without ever offering actual contracts. The site launched into a widespread ad slowdown and Axios reported that it is not yet profitable.
In an apparent effort to shore up the site, Finkelstein has been pitching both new and current investors for a second round of investments for months, Axios reported, putting the target take at $20 million. Finkelstein owned Washington-based news site The Hill before selling it to Nexstar in 2021 for $130 million.
The Messenger failed to draw the massive audience it sought with its attempt at bringing “balance” back to the media. Data from analytics company Comscore shows The Messenger had 11 million total unique visitors and 88 million page views in October.
Finkelstein has pointed to its ability to rapidly grow its audience to investors, Axios reported. He also pitched the promise of its new video product, “The Messenger TV,” which is set to launch later this year.
Meanwhile, President Richard Beckman, who held the same title at The Hill, announced his exit as of Jan. 31 from the company in a lengthy post on LinkedIn. It said that “short-term health issues” drove his plans to retire. Suggestions by Beckman in October that the company was “out of money” spurred talk among staffers about unionizing.
The Messenger said Wednesday that it already brought in more cash. It also denied a report from Semafor that it would be out of money by the end of this month and that the board had considered shutting the publication down, calling the suggestion “absurd.”
“We have already secured investment as part of our second raise, and so the notion of us discussing closure is beyond absurd,” a spokesperson for The Messenger told TheWrap in a statement.
The publication did not offer details on the source of the new cash or the total it had raised.
Axios issued an update later Thursday that Finkelstein met with a number of conservative media and business executives at Donald Trump’s Mar-a-Lago private club on Wednesday, including Omeed Malik of Farvahar Partners, who has also invested in Tucker Carlson’s new streaming service.
The valuation for the start-up is $60 million, according to Axios. The proposal mentioned was $30 million for a 51% position, which would give control to the new investors.
Other investors at the meeting, according to the outlet, were Republican strategist Garrett Ventry; Starboard founder Ryan Coyne; and George Farmer, the former CEO of conservative social media site Parler who is also on the board of Britain’s conservative news network, GB News.
A representative for The Messenger did not immediately respond to a request for comment Thursday.
The Messenger’s original investors reportedly included Stagwell Group, a holding company based in D.C. led by Mark Penn and former Hearst CEO Victor Ganzi; Loews CEO James Tisch; Apollo cofounder Josh Harris; and Interactive Brokers founder and chair Thomas Peterffy. Abu Dhabi-based investment firm International Media Investments is a minority investor via Grid News, which The Messenger bought in March.
