Amid widening concerns that another startup bubble has formed, digital media remains a white-hot market among the private-investment community.
Last year, venture capital poured at least $683 million into digital media companies worldwide -- more than twice the $277 million invested in 2013, according to Preqin, which tracks venture-capital investments.
That investment comes as traditional media companies like The New York Times and Condé Nast cut staff, trim costs and turn over every possible rock in search of new revenue streams. Meanwhile, digital media companies -- which have a fraction of old media's revenue and even less of their profits -- are awash in investor cash.
But unlike the old guard, new media has a growth story to tell, giving it sex appeal. And marketers like sexy. That's crucial as those companies seek to bolster sales because they are, for the most part, relying on old media's business model: attracting ad dollars.
"There's no other big pot of money out there," said Ken Doctor, media analyst for Newsonomics.
The pot is indeed brimming with cash. Marketers are expected to spend $58.6 billion on digital advertising in the U.S. this year, according to research firm eMarketer. But the digital ad market is a bare-knuckle brawl for money. Digital-ad buyers are beating up publishers on the amount they'll pay for an ad, causing the rates to spiral downward. And most of that money is flowing toward large players like Google, Facebook and Yahoo, leaving media companies old and new to fight over what's left.
"Some of these companies are not going to make it," Mr. Doctor said.
Here's a look at the prospects of six digital media firms with millions in private-equity backing that rely on ad revenue to some degree. (Note: All traffic numbers are from ComScore for December 2014.)
Monthly traffic: 35.3 million uniques, a 55% year-over-year increase Capital raised: $55 million
2014 revenue: $30 million
Profitability status: Profitable over the last six months of 2014