Los Angeles media startup HelloGiggles, co-founded by actress Zooey Deschanel, was sold to Time Inc., the companies announced Monday.
Terms of the deal were not disclosed, but sources called it a good return for investors who put $1.25 million into HelloGiggles a year ago. The deal could be worth more than $30 million if performance targets are met, a source said.
When they launched HelloGiggles 4-½ years ago, Deschanel, chief executive and former TV producer Sophia Rivka Rossi, and former blogger and TV writer Molly McAleer filled a website with culture and style articles aimed at creating a “positive” place for young women. But their dream was producing video, Rossi said Monday. With Time, they now have the resources.
“We just felt like in order to be in the place our contributors wanted to go, we should partner,” Rossi said. “We’re excited to use the [intellectual property] of our contributors and expand into TV, online video and film.”
HelloGiggles draws 17 million separate people to its website each month, about three in four of whom are women under age 35 looking for takes on news, culture and style from people like themselves. That’s up from about 12 million a year ago. The company generates revenue largely from ads.
Most of the website’s content comes more than 1,000 paid contributors. HelloGiggles had to make a move to tap their “endless capabilities” in audio and video too, Rossi said.
HelloGiggles already is developing a film called “Sister-in-Law” with Good Universe, working on a comedy with “Pitch Perfect” writer Mickey Rapkin, and has sold a pilot to NBC based on a contributor column.
The startup, which will retain its name and downtown Los Angeles headquarters, has been exploring other revenue opportunities too. It recently toured six major cities for Rossi’s book, “A Tale of Two Besties,” and has drawn about 50 people a month to storytelling events in Los Angeles and New York City.
Time sees the potential.
“Our vision is for HelloGiggles to continue to evolve and grow as a multimedia content business that includes video/television, live events, book publishing and e-commerce,” Time executives said in a companywide email Monday.
Time, Comcast, Disney and other big media companies have spent the last couple of years scooping up parts of or the entirety of smaller online rivals to benefit from their fast-paced growth.
“This bodes really well for the entire ecosystem,” said Chirag Chotalia, vice president at venture capital firm Pritzker Group, which led HelloGiggles' financing a year ago. “It makes clear large, traditional publishers are looking to high-growth, small digital publishers with strong communities to lead their strategies in certain verticals.”
In this case, it’s all about connecting with “female millennials,” said Rich Battista, executive vice president of Time Inc. HelloGiggles, with 22 employees, will sit alongside magazine brands People and Entertainment Weekly.
HelloGiggles’ other investors included BDMI Fund, former NastyGal Chief Operating Officer Deborah Bento and former Time digital President Fran Hauser.
Deschanel, the chief creative officer, said in a prepared statement that Time ensures “we'll be able to...inspire and support even more young women with a safe and positive media platform."
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