Ad-Based Content Companies CAN Get Funded

We just got a funding release from Vital Juice, a free email newsletter publisher focused on women’s health, nutrition and beauty. Seems it raised an undisclosed amount of cash from The Pilot Group, which last struck content gold with DailyCandy.

Pretty interesting deal, in the sense that most VCs have been shying away from ad-based content models. Alan Patricof, for example, told me last fall that his next content investments would have to have more diversified revenue plans, while Jon Flint of Polaris recently said that he likely would not have reinvested in JibJab, had the company not transformed from an ad-based digital studio into a virtual greeting card company.

In an email to peHUB, Virtual Juice co-founder Amanda Freeman wrote:

Yes, the basic business model is ad-based.  Clearly there were many challenges when seeking funding, and our model was certainly more attractive to VCs who have had positive experiences with an ad-based model.  Pilot has a great track record with this type of business (besides for DailyCandy, they sold Ideal Bite to Disney) and I think they were intrigued by our category (health and wellness) in combination with the business model.

I still think this is a one-off from a VC industry perspective, particularly given how even established content providers are getting crushed by declining ad prices/volume. But considering that peHUB shares a bunch of modeling in common with Virtual Juice, we’re glad to see that the investment class has a few remaining believers…