Tastemade raises $35m in latest funding round led by Goldman Sachs Growth Equity

– USA, CA – Tastemade, a Santa Monica, Calif.-based digital-video company that pairs bite-sized videos with audience data, has raised $35 million in its latest funding round led by Goldman Sachs Growth Equity Inc., according to Larry Fitzgibbon, the company’s co-founder and chief executive. The investment bank also led Tastemade’s $40 million round in 2015.

Other backers from 2015 also increased their investment, including venture firms Raine Ventures, Comcast Ventures and Redpoint Ventures. Amazon.com Inc. and Cool Japan Fund Inc., a venture fund aimed at expanding Japan’s cultural footprint internationally, are new investors in the round.

The company plans to use some of the financing to increase its ad sales team and expand into categories such as home and travel. The company is also aiming to invest in original programming and audience development to broaden its consumer reach. By the end of 2019, Tastemade plans to have over 200 staffers, up from its current count of 160.

Founded in 2012, Tastemade is among a group of digital video companies that enjoyed early viral success with “hands-in-pans” recipe videos posted to platforms such as Facebook and Instagram. In 2017, Tastemade introduced home and travel brands as food videos became an increasingly crowded category. Mr. Fitzgibbon said Tastemade’s expansion was part of a business plan to apply the concept of “tastemaking” to other areas of life.

In addition to expanding into new categories, the company earlier this year launched Tastemade TV, a streaming channel that it offers as a $4.99 a month stand-alone subscription and in “skinny bundles” such as Philo and YouTube TV. Mr. Fitzgibbon said Tastemade is a beneficiary of younger viewers shifting away from pay-TV and toward viewing on digital platforms.

“If you look at what we’re doing with our TV network, it’s not just hands-in-pans,” Mr. Fitzgibbon said. “It’s 200 hours of original programming.”

The spread of shareable recipe videos from a variety of digital publishers has challenged food advertisers to find new ways to market their products, said Whitney Smith, the director of digital investment at Mindshare North America.

“Product placement, integrations, and storytelling are where we are headed, and we’re challenging publishers to bring forth these types of ideas,” Ms. Smith said.

Many digital publishers are struggling to grow their businesses in a digital advertising marketplace dominated by Alphabet Inc.’s Google and Facebook Inc. But Tastemade has grown its sponsored-content business by 50% in 2018 compared with the previous year, said Mr. Fitzgibbon, but declined to disclose actual revenue. The company has also sought new revenue streams, selling kitchen utensils in its online shop and holding live outdoor food events, though advertising remains Tastemade’s biggest source of income.

Of late, Tastemade has also begun pitching metrics-obsessed chief marketing officers on using audience data from the company’s more than 3 billion monthly video views to help inform their product choices, Mr. Fitzgibbon said.

It signed a deal this year to help the Subway sandwich chain develop and market new sandwiches by tapping into insights gleaned from Tastemade search data.

“We’ve got a real-time focus group going every day,” Mr. Fitzgibbon said, referring to the Subway partnership. “We’re creating original programming. We’re testing out new ideas. We’re pushing them out to the audience and real-time. And we’re providing insights based on that to our partner.”

The competition around data is no less crowded than the battle to sell video: Publishers including Bon Appétit parent Condé Nast are also mining video views and consumer behavior for insights to offer marketers.

For more information : http://www.tastemade.com

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