Guardian to invest in tech startups that support future of news with £42m venture capital fund

Guardian Media Group has launched a venture capital fund to invest in media technology

Guardian Media Group (GMG) has launched a £42m venture capital fund, GMG Ventures, that will see the publisher invest in technology startups that support the future of news in a sector that faces "ongoing disruption", it said.

The fund will invest in early stage businesses focused on areas such as artificial intelligence (AI) and machine learning; adtech that addresses fraud detection and new formats; payment technologies; and new forms of content distribution, via audio and voice platforms or virtual (VR), mixed and augmented reality (AR) models.

The businesses will, in some shape or form, support the Guardian's core news business, either by acting as tools for journalists, enriching the experience for readers, or by making it easier for advertisers to buy media.

The publisher said the businesses will accelerate its strategy, or "be adjacent and disruptive to the news sector".

The Guardian’s existing investment in Founders Factory, which sees the two companies support the growth of five early stage media technology start-ups each year, will also be managed by GMG Ventures.

David Pemsel, the chief executive of the Guardian, will chair GMG Ventures. Alan Hudson, who joined as chief investment officer in 2011, will become managing partner of the venture.

“In a rapidly changing media landscape, GMG Ventures will be an essential addition to the experience, skills and qualities of the Guardian, giving us access to the new ideas and innovation that entrepreneurs bring to the table," said Pemsel.

"GMG Ventures will aim to secure investments in some of the very best new businesses emerging out of the media and tech space in the UK, US and Continental Europe.”

Hudson added that it was "uniquely positioned to be a value-add investor."

"The Guardian is well-placed to understand the rapid changes to the news sector and the investment opportunities that disruption presents," he said.

The Guardian is one of many publishers looking to safeguard its core news business in a challenging market by looking beyond traditional sources of revenue in subscriptions and advertising.

News UK launched a startup incubator in September that will see it take up to six small companies and host them in a month-long incubator programme in hopes of unearthing new revenue streams.

The Guardian is also taking a unique approach when it comes to hedging its revenue bets, by launching a nonprofit in the US asks individuals and organisations to fund journalism aimed at tackling social or environmental issues.

It builds on the publisher's existing membership scheme that asks readers to donate to ‘secure its future’, as advertising declines, circulation and subscription slides, and increased competition from online players has left many traditional publishers hemorrhaging revenue.

GMG's losses hit £45m in the financial year ended 2 April 2017

Jonathan Evans, who has thirty years of experience in fund management, will take over the stewardship of GMG’s endowment fund as head of investments.

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