Two years after acquiring business news site Quartz, Japanese firm Uzabase has sold Quartz to its co-founder and CEO Zach Seward. Editor-in-chief Katherine Bell, who joined Quartz in 2019, is now a minority owner. Seward and Bell intend to operate the eight-year-old Quartz as an independent media company. Uzabase had purchased Quartz in 2018 in a cash-and-stock deal worth about $86 million. The acquisition is effective immediately. The parties did not disclosure terms of the acquisition.
According to TechCrunch, Uzabase was not able to make Quartz profitable. In 2019, the company had revenue of $26.4 million and a loss of $18.6 million. Earlier this year, Quartz laid off about 80 staff.
“Make business better”
“Quartz’s mission is to make business better,” Seward said in a November 8 blog post. “We want Quartz to be an ally and resource to our readers in developing new and better ways of doing business. This is an exciting moment for our own business, as we become an independent media company again. I’m thrilled to be taking this step after helping to build Quartz, with so many others, over the past eight years.”
Letter to Quartz readers
In a letter to readers, Seward explained the reasons behind the acquisition. Here is an excerpt:
“Our founding values, many of them threatened by events of the past eight years, feel more urgent than ever. The pandemic has tested long-held assumptions about how business is conducted and challenged companies, including our own, to take a long-term view in the face of acute financial pressure. Even before this tumultuous year began, an important debate had emerged about the purpose of companies and their obligations to society—a picture of business that goes well beyond maximizing shareholder value. But it’s one thing to talk about ‘stakeholder capitalism’ or ‘corporate social responsibility,’ and quite another to live those values in practice,” wrote Seward.
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“It’s a put-up-or-shut-up moment. At Quartz, we are ready to put up, through our own actions and through the lens we apply to business journalism. When we talk to you, our readers, we hear similar conviction and urgency. You crave a greater sense of purpose in your work and expect the work you do to have a net-positive impact on the wider world. We agree, and want Quartz to be your ally and strongest resource in developing these better ways of doing business,” Seward added.
Seward also explained the reasoning behind becoming a private company again. Under Uzabase’s ownership, Quartz was a public-traded company based in Tokyo. Seward said that model worked for at time, but he wants to operate more like a startup with the freedom to grow and evolve as they see fit.
Quartz membership model
In 2019, business news site Quartz started using its current membership model. Not including promotional discounts or promo codes, the annual plan is $99.99, and the standard monthly plan is $14.99 a month, following a seven-day free trial. A membership funds Quartz’s journalism, and gives readers complete access to content behind the paywall including premium features like field guides, emails, and presentations. In his letter to readers, Seward said he will be looking for new ways to fund the news site’s growth and he encouraged readers to email him with ideas for supporting the Quartz mission.
MediaPost reported that, this summer, Quartz had more than 21,000 subscribers, double the number of subscribers in less than a year. Uzabase CEO Yusuke Umeda will provide debt financing for Quartz as it goes private. Umeda said that he strongly believes in the value of Quartz and in Seward and Bell.
This is exciting news, for Quartz at least. For Uzabase, this was likely a fire sale. It isn’t very often that you see a public company sell a business to its co-founder and CEO, so they could take it private. Like so many media organizations, the pandemic boosted subscriber numbers but advertising revenue went the opposite direction, making it hard for many organizations to stay afloat. Though the pandemic continues, perhaps this new business strategy, and additional financing, will help Quartz continue its membership growth in 2021 so the business news site can not only survive COVID, but thrive!