Sometimes companies attract buyers because of niche expertise. Other times the reason is technology or outstanding design. And sometimes it’s a coveted demographic.
That’s where The Peak, a Canadian newsletter and podcast company founded in 2020, really stood out. With its young professional audience, it caught the eye of ZoomerMedia, an established Canadian media company that wanted to expand beyond its initial 45+ demographic.
ZoomerMedia acquired The Peak in a deal worth $3.75 million US ($5 million Canadian) in June 2023. Its goal: Combine Zoomer’s scale with the youthful scrappiness of The Peak to win over Canada’s young business news consumers.
A newsletter hustles its way to fast growth
At the start of the pandemic, Canadian serial entrepreneur Brett Chang and his business partners Alex Blumenstein and Taylor Scollon were searching for their next idea after founding several startups, including Leaf Forward, which incubated cannabis businesses. They noticed a gap in the local media landscape.
“We loved Morning Brew and couldn’t figure out why nobody was writing a similar product for Canada,” Chang explained in a LinkedIn post. After researching Morning Brew’s business model, The Peak was born, with the company sending out its first newsletter during the pandemic in August 2020. The three entrepreneurs raised $412,000 Canadian from angel investors to build the business.
The Peak’s daily newsletter breaks down Canada’s top business stories in a quick, fun, easily digestible that attracts a younger audience — The Peak’s readership has an average age of 28. The newsletter grew to 8,000 subscribers in five months, reflecting both the format’s appeal and the founders’ direct outreach.
“We got our first 1,000 subscribers through brute force,” the founders explained in a blog post. “We posted on our personal LinkedIn, Facebook, Twitter, and Instagram accounts with a story on why we founded The Peak and what readers could expect. But the real growth came from direct 1-to-1 messaging. We went through our contact list and individually messaged anyone who might be interested.”
A series of contests giving away prizes like Airpods helped The Peak attract several thousand more subscribers at a relatively low cost. A referral program also drove growth by encouraging readers to nudge their friends to subscribe in return for points redeemable for company swag, again following the Morning Brew playbook. ‘Campus Ambassadors’ pushed the newsletter to MBA students.
As its audience grew, the company added podcasts and events to its offerings, eventually reaching 115,000 subscribers for its newsletter and a combined 100,000 monthly downloads of its two podcasts, news roundup The Peak Daily and Free Lunch, which features deep dive interviews with experts.
The Peak’s expanding audience was impressive, but Chang said what really vaulted the company was its focus on ad sales to large enterprises like B2B SaaS companies and financial institutions. In 2023 the business is on track to do $3 million Canadian in revenue with a 31% margin, Chang told They Got Acquired.
The team increased to 10 full-time employees. “We produce a ton of content. Only through hiring great editorial staff and focused processes were we able to keep up quality and output,” Chang also said.
An established brand looking for youthful energy
This combination of a growing audience of young, business-savvy professionals and a solid business model attracted interest from acquirers, but it was only when ZoomerMedia came calling that the co-founders seriously considered selling.
Founded in 2008, ZoomerMedia is a Canadian media company originally focused on the 45 and over demographic across a wide array of media channels, including TV, radio, print, digital and conferences. It had already spent millions acquiring blogTO and Daily Hive to expand its younger audiences. Acquiring the Peak was its next move in that campaign.
“I’ve been a fan of The Peak’s lighter tone, packaged along with its concise content, since I first came upon it a while ago,” Moses Znaimer, ZoomerMedia’s founder, said in an acquisition announcement. “I understand busy people – and if The Peak can bring them, which is to say me, all the top daily finance and tech stories we need to know in less than 10 minutes, that’s a big idea with a big future.”
Welcome @readthepeak to #ZoomerMedia! Biz news is serious biz but I’ve been a fan of their lighter tone+concise content. I understand busy people+The Peak can bring them, which is to say me, the top daily finance+tech stories in less than 10mins. That’s a big idea w/a big future. pic.twitter.com/5ZYlrY2Acx
— Moses Znaimer (@MosesZnaimer) June 8, 2023
The Peak co-founders saw the deal as a way to accelerate growth. “This is an incredible opportunity to supercharge The Peak’s mission of becoming the go-to media outlet for modern business leaders and decision makers in Canada,” Chang said. “Not only will Zoomer’s resources allow us to grow faster and further than we could have alone, the opportunity to learn from and work with Moses will help take our operation to the next level.”
The parties agreed to a price of $5 million Canadian, or $3.75 million US. That included $3.5 million (Canadian) cash and a $1.5 million (Canadian) promissory note. “The valuation was derived from revenue,” tweeted Chang regarding the figure. The sale price was a 1.7x multiple of projected revenue (TGA calculation). All three co-founders stayed on at The Peak to continue to build the business.
Chang wouldn’t comment about an earn-out, but the news release doesn’t mention one. He said the process reset his expectations regarding the complexities of even a straightforward acquisition.
“My impression was that deals move faster than they actually do. Zoomer was a great partner and we were able to close in four months (fast relatively) but I originally thought this could be done in a few weeks,” he said.
Chang described hiring a lawyer for the deal as “the best decision we made” and advises other founders considering an acquisition to do the same: “Hire a lawyer you really trust who can guide you through the process.”