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The independent media brand 1440 has received a third-party valuation of $101 million, according to its chief executive Tim Huelskamp, a figure that reflects both its unusual financial discipline and its ambitions beyond the inbox.
The valuation was conducted earlier this year by a large investment bank using a multiple of four times revenue on approximately $27 million in annual revenue, which it generates with just 27 employees.
Companies are typically assigned a valuation based on a multiple of either their revenue or their earnings before interest, taxes, depreciation, and amortization. Companies with business models considered to be more durable, lucrative, or otherwise attractive receive higher multiples and more favorable terms.
While companies often receive updated valuations after fundraising rounds, 1440 has never raised outside capital and is not looking to sell, according to Huelskamp. Instead, the reasons for the audit are more practical: Everyone at the company holds equity, and the IRS requires a fair, third-party valuation for options and share-pricing purposes. It is currently distributing dividends to employees and founders.
The valuation catapults 1440 into slightly more rarefied air. According to comparisons shared by the company, Morning Brew was acquired at a valuation of 3.8 times revenue, Axios at 6 times revenue, and Industry Dive at 6.5 times revenue. On the higher end, The Free Press went for 7.5 times revenue and The Athletic for 8.5 times.
These points of comparison are directionally helpful, but inexact. Morning Brew and The Athletic were both purchased during the heady days of the pandemic, while The Free Press benefited from a highly differentiated founder and editorial identity. Industry Dive caters to a strictly professional audience, while 1440 attracts a general readership.
As such, its valuation is best understood as reflective of the future value of the company, more so than its current book price, according to Robert Berstein, a managing director at JEGI Leonis, an investment bank that advises on media M&A.
“The valuation that they have today reflects more than what they are,” Berstein said. “If you’re purely a newsletter business, that is a pretty aggressive view.”
