Amzon.com Inc. (NASDAQ:AMZN) is in discussions to acquire podcast startup Wondery as the tech behemoth pushes into the burgeoning audio sector.
Wondery valued around $300 million
Wondery is popular for shows such as Dying for Sex and Blood Ties. According to people familiar with the matter, a deal will cost around $200 million. In June 2019, it was valued at $100 million during the startup’s last funding round. Wondery is on track to grow revenue to over $40 million this year, according to a source familiar with the deal. Around 75% of the revenue will come from advertising. The rest come from subscription services such as Audible and Stitcher Premium, licensing to TV, and Wondery+ premium subscription service launched in the summer.
Currently, Wondery is among the most popular podcast networks in the US. Two of its shows were in the year-end podcast lists of Apple. Wondery is one of the independent podcasters in the market, and this could be a massive opportunity for Amazon to buy into the fast-growing podcast field. Some of the investors of wonder include Waverley Capital, Greycroft Partners, Advancit Capital, and Lerer Hippeau Ventures. According to sources familiar with the issue, discussions are still at the early stages and could still fall apart.
Fast-growing podcasting industry attracting tech companies
The tech giant’s foray into the segment coincides with burgeoning growth in the small but quickly expanding podcasting market. In recent years the once domain for true-crime content, super-niche fare, and pop-culture dissections has exploded as a niche for political programming and entertainment. According to Edison Research, podcasting attracts over 100 million monthly active listeners.
Meanwhile, in 2019, US podcast ad revenue increased by 48% to $708.1 million, and by 2021, revenue could exceed $1 billion. In recent times, tech and media companies have been acquiring podcast startups. For instance, Spotify acquired Gimlet Media last year for over $200 million, and New York Times Co said in July that it would acquire Serial Productions for around $50 million subject to performance metrics and certain milestones.