Punchbowl News closes deal to buy data start-up
Since leaving Politico three years ago, the founders of Washington news startup Punchbowl News have made their mark with aggressive reporting inside the Beltway, breaking news on the Capitol riot, Speaker Kevin McCarthy’s messy impeachment and the death of Sen. Dianne Feinstein from California.
Now they’re opening a new avenue to reach political obsessives by acquiring a startup that tracks legislation making its way through Congress.
Punchbowl News said Thursday it was making an acquisition Electroanalysis, a company that provides data to help decipher and analyze legislation. The stock deal values Punchbowl News at more than $100 million, according to two people familiar with the transaction.
The deal is a sign of an increasingly popular approach among digital news startups. Instead of trying to cover the entire world and relying on advertising, the media focuses on narrow areas of coverage that people are willing to pay for.
“The trade publication for the digital age is current, delivered to you immediately and gives you something you wouldn’t otherwise know,” says Ken Doctor, media analyst and entrepreneur. “Usually a combination of really important data, breaking news and interpretation.”
Jake Sherman, Anna Palmer, John Bresnahan and Rachel Schindler, the Politico alumni who co-founded Punchbowl News, planned from the start to offer data as part of a pitch to subscribers, who pay $300 a year for their membership, said Mrs. Palmer. , 41, CEO of Punchbowl. The startup — named after the Secret Service codename for the Capitol — has been in discussions with Electo Analytics since this summer and hammered out the broad outlines of the deal over dinner over Labor Day weekend, Ms. Palmer said.
Punchbowl News is betting that the intricacies of the legislative process will be a major selling point to its readership, which Mr. Sherman says includes senators, congressional representatives and their aides. The company, which has a website and three daily email alerts, also recently launched a text messaging service that offers seasoned users an urgent look at the news. (“DIANNE FEINSTEIN HAS DIED AT 90. PUNCHBOWL NEWS TEXT A FEW MINUTES AGO,” barked a tweet mark the report.)
The company plans to increase its annual subscription by $50 in January and will also eventually offer a more expensive plan that includes data from Electo Analytics for more than $1,000, but final pricing has not yet been determined.
“We have a deep understanding of who our audience is, and we want to serve them in new ways – and in ways where we’ve heard from them that they want more information from us,” Ms. Palmer said.
Punchbowl News is one of the most promising newcomers to the digital news industry in many years. Ms Palmer said the company generated $20 million in revenue this year and is profitable. Although the company focuses primarily on subscriptions, it said it is almost halfway to its projected advertising revenue target for 2024. Advertisers include Meta and Exxon Mobil.
Ms. Palmer declined to reveal the advertising revenue target or how many paying subscribers Punchbowl News has.
Punchbowl News is also expanding its coverage of the financial services industry — “explaining Washington to New York,” Ms. Palmer said. The company plans to employ about 30 people by the end of next year, up from 23.
“Our goal is to stay agile,” she says.