Semafor Raises $19 Million, Replacing Money From Sam Bankman-Fried

Semafor, the digital-media start-up, has raised $19 million from investors including the Yahoo co-founder Jerry Yang, replacing the money it had received from the disgraced cryptocurrency mogul Sam Bankman-Fried.

The money from Mr. Bankman-Fried, roughly $10 million, will be placed in an account separate from Semafor’s other funding and returned to his creditors at the direction of the authorities, said Justin Smith, Semafor’s chief executive and one of its founders.

“It was very important for us — more than that, it was necessary for us — to turn the page on this chapter,” Mr. Smith, a former Bloomberg Media chief executive, said.

In addition to Mr. Yang, Semafor’s new investors include Henry Kravis, a co-founder of the private equity giant KKR; Jamal Daniel, owner of the Middle East news website Al-Monitor; Jorge Paulo Lemann, a co-founder of 3G Capital; and Stand Together, a network of business leaders founded by the entrepreneur Charles Koch. The polling organization Gallup is also an investor.

The investors have ties to both political parties, with Mr. Yang a regular donor to Democrats and Mr. Koch a major contributor to conservative causes.

Semafor declined to reveal its valuation after the latest funding round.

Semafor’s other founder, Ben Smith, a former editor in chief at BuzzFeed and New York Times media columnist, said he and his partner were introduced to Mr. Bankman-Fried by one of his brother’s advisers in early 2022 when they were raising funds for Semafor. Mr. Smith said he had realized that Mr. Bankman-Fried’s investment posed a problem for Semafor after editing an article about Mr. Bankman-Fried’s attempt to bail out FTX, his troubled cryptocurrency exchange, written by Liz Hoffman, a Semafor editor who covers business and finance.

He said he and Justin Smith had not spoken with Mr. Bankman-Fried about the investment since FTX filed for bankruptcy protection in November.

Semafor has booked more than $10 million in revenue in 2023, split between advertising and events, which have been a larger-than-expected contributor to the company’s business, Justin Smith said.

He said Semafor, which initially described its target audience as every college-educated English speaker around the world, had narrowed it to a group of influential opinion leaders. He said Semafor had 400,000 subscriptions to its free newsletters, which cover media, finance, technology and politics. Its website drew 1.5 million users ‌in April, according to Similarweb.

“We were launching at a time when the smoldering carcasses of scaled media were littered everywhere,” Justin Smith said.

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