Mitú, a multi-channel YouTube network targeting the LatinX consumer has been sold to Latido Networks. How much did Latido pay after investors poured more than US $50 million into Mitú over the last 8 years? What is the rational for the acquisition? And what does the transaction say about the growing LatinX advertising market?
1. To whom was Mitú sold to?
The company that has bought Mitú is a relative newcomer to the media sector: Latido Networks is a multiplatform media company that creates content for LatinX millennial and Gen Z viewers, it owns the Latin music-focused YouTube multi-channel network VidaPrimo, and recently acquired a minority stake in the double digits in podcast company reVolver Podcasts. GoDigital Media Group — Latido’s parent in audio also owns the indie label Cinq Music, digital rights management company AdShare, and digital supply chain company ContentBridge. After the acquisition, Mitú will coexist alongside Latido Networks — the company’s media division that comprises a 24-hour connected TV channel called Latido Music.
2. What is the price of the transaction?
Sources at Latido did not want to disclose the price of the acquisition. However, its a safe bet to say that this has been a fire sale that provides Mitú a lifeline of sorts. Mitú has had difficulties finding profitability over the last years, in fact there are reports that it had been failing to pay YouTubers that were part of its multi-channel network their earnings as far back as last August and September, although creators now tell that payments have restarted in recent weeks. Multi-channel networks were very hot from the early years to the mid years of the last decade (e.g. Warner Media’s acquisition of Otter TV for US $ 1 billion and Verizon acquiring Awesomeness TV in 2016 for US$ 650 million). However, these companies were able to scale at a rate Mitú has not been able to.
3. What is the rationale for Mitú’s sale?
“It’s very much a “zipper” concept, meaning they provide much of what our other brands (most specifically Latido) were seeking to build, and we have the infrastructure and media impressions that will help Mitú get even more out of its brand reach”, a source at Latido Media tells Portada. Mitú has an engaged audience in the U.S., in English, a strong sales and sales support team. Latido has a Spanish-speaking audience that skews towards Latin America, (not U.S.), wide media distribution particularly in connected TV and global content production. Un-deduplicated audience numbers are 16 million U.S. monthly for Mitú, while Latido and Vida Primo YouTube network have more than 25 million in the U.S.
4. How much money did investors put to work in Mitu since 2012?
More than US $50 million. The high growth rate of the online video (advertising) market has been luring investors for the last decade. also in the multicultural space. In 2012, MItú got funding from a group of investors led by the Chernin Group.Then in November 2018, the company got an additional US$ 10 million in new funding led by San Francisco-based LEAP Global Partners along with participation from prior investors including Upfront Ventures. Previously, Mitú had raised $42 million from investors including Upfront, Comcast, WPP, Verizon Ventures, AMC Networks, Chernin Group and Awesomeness (now owned by Viacom).
5. How large is the LatinX Digital Advertising Market?
“Media companies simply cannot be relevant going forward without a strong foundation in the United States LatinX community,” Jason Peterson, the CEO of GoDigital Media Group — Latido’s parent company — said in the press release which announced the acquisition. Portada estimates, that digital advertising in English-language media targeting Hispanics (predominantly the LatinX market) rose to US $1.07 billion in 2019. Approximately 80% of that amount is sold by Google and Facebook, leaving approximately US $210 million for the other players. The changing profile of the identity of U.S. Hispanics is reflected in the evolving structure of advertising expenditures (check out our recent Insights Report-How brands engage U.S. Hispanics: New segmentation approaches), digital advertising in English-language media targeting Hispanics is growing at a high rate, while advertising in Spanish-language media is decreasing at a higher rate than overall advertising targeting Hispanics.