Sports podcast company Blue Wire raises $2.5 million, aims for profitability in 2023
Blue Wire, a podcasting company that primarily focuses on sports, raised $2.5 million in funding.
East Carolina Angels and the Pirate Entrepreneurship Fund, both affiliated with East Carolina University, together invested $945,000. Kevin Jones, who founded Blue Wire in August 2018, graduated in 2011 from East Carolina. Dot Capital, a New York venture capital firm, invested $750,000, while a group of angel investors also participated.
Jones owns 50% of the company, which has 250 podcasts, including those of former NFL player Chris Long, former NBA player Richard Jefferson, Miami Heat guard Duncan Robinson and defensive end Las Vegas Raiders Maxx Crosby.
Dot Capital, Blue Wire’s second largest shareholder, has invested nearly $5 million of the $11.4 million Blue Wire has raised since its inception, according to Jones, the company’s chief executive.
The latest investment was in the form of a convertible note, meaning it was structured as a short-term loan with the intention of converting it into shares of Blue Wire. The company did not disclose its valuation, but Jones, 33, said Blue Wire was in the market to raise additional capital to fund its growth plans.
Blue Wire is on track to generate $10.3 million in revenue this year, up from $4.8 million last year and $1 million two years ago, according to Jones. He added that the company’s podcasts are on track to have 124 million downloads this year, up from 60 million in 2021 and 16 million in 2020.
The company hopes to hit profitability for the first time next year when it estimates it will generate $23 million in revenue and total 250 million downloads.
As venture capital funding dries up due to tough economic conditions, investors are much more focused on profits than in previous years, Jones said.
“A lot of VCs are stepping down,” Jones said. “They’re just like, ‘It’s too risky now.’ People have to find different ways to fundraise.I’m proud to be connected to my alma mater, East Carolina.
He added: “The purse strings are tighter. They were a little looser in previous years, which was good for us. Everyone still has a match there. If your business is growing quickly and you have the necessary measures, you should be able to find a handful of people, but it becomes more and more difficult. There are a lot more no’s and the process is going to take longer for entrepreneurs to raise capital, or so we are seeing.
For Jones, even being able to start and run a fast-growing startup is more than he envisioned. After graduating from college, Jones worked in the sports media industry for several years, including as a sports producer for the WUSA television station in Washington, D.C., a reporter for the Cleveland Browns website, and a content manager. digital and reporter for the San Francisco 49ers. for KNBR, San Francisco’s premier sports radio station.
Jones dreamed of one day hosting his own sports radio show in a top market, but he was frustrated by the lack of opportunity he saw to achieve that goal and work in an unforgiving industry. When he was fired from KNBR in August 2017, Jones started his own podcast, Striking Gold, where he discussed the 49ers.
The podcast attracted around 5,000 to 6,000 downloads per episode. But Jones was only earning $2-3 CPM (cost per thousand impressions) when he uploaded the episodes to Audioboom, an audio distribution and podcasting platform.
Jones knew there were other dedicated podcasters making similar money, so in August 2018 he officially launched Blue Wire with the goal of creating a network of sports podcasts from major professional and college sports teams across the United States.
“I struggled as a journalist,” Jones said. “I had an Aha moment of, ‘I might as well roll the dice as an entrepreneur. I think I’ll even be respected if Blue Wire doesn’t take off. At least I tried.’ Somehow we captured lightning in a bottle For me it’s all about relationships and building with people you love to build with If you can hire the right people and choose the good content creators, it ultimately comes down to this.
At first, Jones invested $17,000 of his own money to launch Blue Wire. The company raised its first outside capital in May 2019 when 500 Startups, a venture capital firm and early-stage accelerator, invested $150,000. In August, Blue Wire hired its first employee besides Jones, bringing in Peter Moses, who had worked as a producer in the Los Angeles area for about a decade. Moses is currently the company’s Senior Vice President for Original Narrative and Conversational Podcasts.
In early 2020, just before the onset of the coronavirus pandemic, Blue Wire raised $1.2 million in a funding round led by Dot Capital. The company raised more money last year from Dot Capital.
“I increased my investment because the company was able to meet its downloads, revenue and expense targets,” said Joseph Saviano, founder and managing partner of Dot Capital. “I am very happy with the performance. I think they’ve figured out how to capitalize on discovering new talent that’s interesting and relevant to young audiences. This resulted in a disproportionate growth in the number of plays, downloads and advertisements. »
Blue Wire has stayed true to its roots by signing deals with podcasters that focus on specific teams in the NFL, NBA and other sports. But it also offers podcasts in other areas like business, chess, and dungeons and dragons, and over the past year it has expanded to partner with former and current top athletes like Long and Jefferson.
As part of the WynnBET deal, Blue Wire licenses Long’s popular Green Light podcast, co-produces the podcast with Long’s Chalk Media company, and assists with advertising sales and other business and operational functions.
In January, Blue Wire entered into agreements to handle sales, marketing and production of “Road Trippin'”, a podcast hosted by Jefferson and former NBA player Channing Frye, and “The Long Shot”, hosted by Robinson. Jones said athletes view Blue Wire as an attractive partner because of the company’s reach and the fact that Blue Wire does not own or operate the podcasts, which gives them the freedom to express themselves freely and retain their intellectual property.
“We want (Long) to be exactly himself,” Jones said. “Richard Jefferson is the same way. He is enterprising. He wants to tell his own stories without any filters. But they need a business partner, they need production, marketing. How do we help grow audience? They could bring all this content to ESPN, but then they’re put in this machine, they have to say this, promote it on the podcast. Athletes want to keep their digital content. It’s like church and state. They want to keep it separate from larger entities. They want to own it and plug it into a place like Blue Wire. More and more athletes see the future of this.
Blue Wire generates approximately 75% of its revenue from advertising, with podcasters sharing ad revenue based on the number of downloads they receive and other metrics. Podcasters working alone typically use programmatic ad sales, where a third party handles the process of automatically buying and selling ads, resulting in low CPMs. But Blue Wire’s sales staff are able to leverage the company’s reach to land more lucrative deals with advertisers, which benefits individual podcasters, according to Jones. Blue Wire has worked with over 50 advertisers this year alone.
“I try to make the experience as great as possible for podcasters,” Jones said. “They get a clear receipt from us at the end of each month of here’s your payment, here’s why, here’s the ad campaigns you’ve been on. Everything that was wrong with the industry four years ago for me , I am trying to fix it.
The remaining 25% of Blue Wire’s revenue comes from other avenues such as licensing deals and working with brands, including Mountain Dew, on their company’s podcasts. The company also works with YouTube and TikTok influencers.
The podcasting industry has seen commercial success among startups, including with Spotify paying $230 million in 2019 for Gimlet Media and $250 million in 2020 for The Ringer, which was founded by the popular former personality. ESPN, Bill Simmons. Gimlet is perhaps the only content publishing podcasting company to launch a Series B round, while the others were launched with less capital or without help from the VC community.
“(The podcast industry) is so new that some venture capitalists can’t see huge exits because they haven’t happened,” Jones said. “I think it’s a story. All entrepreneurs will fight some kind of narrative right now, but the podcast’s narrative is, “There haven’t been a lot of companies at the venture capital scale. Why you guys?
Later, Jones is eyeing media companies, radio conglomerates, sports betting operators and over-the-top streaming platforms as potential buyers for podcasting companies like Blue Wire. But for now, Blue Wire is focused on continued growth and bottom line.
“I saw the tech bubble burst in 1999, 2000,” said Saviano, who has worked in venture capital and private investments since the early 1990s. world in the world are telling their businesses to get to profitability as quickly as possible… We’ve never raised a big round and we’ve never had the big burn so we’re in a good position to handle this phase.