Axios to be sold to Cox Enterprises as legacy media pursue start-ups

Axios, the digital news company best known for delivering political and business scoops in succinct bullet points, has agreed to sell itself to Cox Enterprises for $525mn, the latest start-up to be acquired by legacy media.

Launched five years ago by former Politico executives Jim VandeHei, Mike Allen and Roy Schwartz, Axios has rapidly carved out a niche with some of the most influential newsletters in Washington and the world of venture capital and technology.

The sale of Axios comes at a time when new media companies have attracted investments from traditional media organisations, venture capitalists and wealthy individuals in a wave of dealmaking.

Axel Springer, the German publishing group backed by private equity firm KKR, bought Politico, which was also co-founded by VandeHei, for about $1bn a year ago. The New York Times took over sport site The Athletic for $550mn in January.

Separately, former Bloomberg Media chief executive Justin Smith and ex-New York Times media columnist Ben Smith have raised about $25mn for another high-end digital news start-up called Semafor.

Cox plans to invest significantly in Axios, which has been trying to expand into local news, as the Atlanta-based media group seeks to diversify its offering from its traditional business, which includes cable and automotive news.

“Bringing a forward-thinking organisation like Axios into Cox Enterprises is exciting for us on many levels, and we look forward to helping them continue to scale and grow,” said Cox chair and chief executive Alex Taylor, who will join the Axios board.

VandeHei, Allen and Schwartz will continue to own a significant stake in the company and will continue to run it on a day-to-day basis. The three founders will also have incentives to make sure they stay on after the deal is closed.

In an interview with Digiday in December, Schwartz said Axios was to generate revenue of around $86mn in 2021, a 40 per cent increase on the previous year. Schwartz said that Axios would return an unspecified profit for the third successive year.

After its launch, Axios initially tapped Washington’s lucrative political advertising and events market but has since branched out to local news and this year launched its specialist subscription product, Axios Pro.

The group says it has more than 2.4mn subscribers to its free emails and, through its local news networks, plans to expand to 25 American cities this year.

Family-owned Cox was founded in 1898 and has $20bn in annual revenue, according to its website. Its media assets include Cox Communications, a cable television company; automotive trade publications such as Kelley Blue Book; and the Atlanta Journal-Constitution newspaper.