Venture Capital Finance


Piedmont RIA through its affiliate Militello Capital, just has made a venture capital investment in YaSabe, Inc., a bilingual social, mobile and local search venture specifically catering for Hispanic consumers living in the United States.

Headquartered in Herndon, VA, YaSabe lets Hispanic consumers search in English and Spanish to find and discover local businesses, coupons and other local information. Users come directly to YaSabe.com or come via popular search engines such as Google, Bing or Yahoo when they search in Spanish or when they search for a products or service that are culturally Hispanic. YaSabe already responds to millions of queries from Hispanic consumers, 40% of which are searching from their mobile phones either using a browser or using one of several mobile apps that are available for free for the iTunes or from the Android Marketplace.

“We are always excited to fund emerging companies that deliver a unique value proposition both to their customers and to our investors”, says William Militello, founder and Managing Principal of Piedmont. He continues, “Zubair and Azim have a unique content proposition for Hispanic consumers, a huge economic force in the U.S.; it’s an investment opportunity that fits perfectly into our portfolio.”

Some stories the Hispanic  Marketing, Advertising and Media world is talking about this week.

»Geotargeting is not just for digital properties, Telemundo does it too!
Telemundo Media announced Telemundo+, an advertising collaboration between Telemundo and Comcast Spotlight—a business unit formed to help marketers take advantage of rapidly developing multi-screen advertising opportunities, —to build an advertising platform that enables leading marketers to geo-target relevant Hispanic households across multiple screens with English, Spanish or bilingual customized messages on general market cable networks. Telemundo+, a product of Hispanics at NBCU, has signed several clients upon the program's launch, including Toyota. Hispanics at NBCU offers advertisers an opportunity to reach Hispanics across the spectrum of language and acculturation using marketing and media executions on various NBCU platforms.

»Political advertising in Spanish lags
The United States Hispanic Chamber of Commerce (USHCC) yesterday issued a new report as part of the Speak Our Language project that found Spanish-language advertising continues to represent a relatively small fraction of election advertising spending, even in the states with the largest and most electorally-significant Hispanic populations, the Los Angeles Times reports.  Using comprehensive data on local television advertising from Kantar Media’s CMAG, the study found that in ten states analyzed from April 10, 2012 to Sept. 25, 2012 the total spend on political advertising was $358,898,420. Of that sum, $16,410,140 went to Spanish-language advertising, representing just 4.57 percent.  The study looked at political TV advertising spending in Arizona, California, Colorado, Florida, Illinois, New Mexico, Nevada, Texas and Virginia on local, state and federal election races. In those states during that time, $358.9 million was spent on political advertising. Of that, $16.4 million or 4.57% was spent on Spanish-language advertising. These figures represent ads for local, state and federal elections. At the presidential level, the Obama campaign has aimed almost 10% of its money toward attracting Hispanic voters in those states while the Romney campaign is just over 4%.

» Grupo Ferre Rangel launches multimedia platform (including print!)
GFR Media, the publisher of Puerto Rico’s El Nuevo Día, announced the launch of Indice – an innovative, free multimedia platform – to debut in October. Indice will combine a lively print product, social media connections, a branded website, as well as targeted distribution, marketing and promotion teams across Puerto Rico’s high-traffic public spaces.  Indice street teams will also offer branding opportunities for advertising clients to display their consumer messages, establishing a new outdoor advertising model for the Puerto Rican market. Indice’s target user is the young, urban (18–44) Latin consumer seeking concise & hip content. Potential market size in Puerto Rico alone is over 900,000 consumers out of the island’s population of 3.9 million.  Will Indice’s digital media properties also reach out to Hispanics in the mainland U.S. market? A spokesperson for GFR tells Portada that “The primary target audience for Indice is on the island – where the potential market among the 18-44 audience is 900,000. But Indice will also leverage the social media expertise of GFR Media – whose El Nuevo Día has the fifth largest social media user base of any U.S. newspaper – while one third of those social users are on the mainland U.S. That’s a testament to the enduring cultural links puertorriqueños living off-island have always maintained. And a great opportunity for Indice’s journalists to capitalize upon in an even greater way going forward – as a pan-Latino audience expands and matures.”

» More from Puerto Rico: Metro launches free daily
Competition for GFR,Metro, the Swedish free newspaper publisher, has announced the launch of a digital and print Puerto Rican edition as part of efforts to expand its reach in Latin America, the Drum reports. The title is already the largest newspaper in the region with nearly 3m daily readers across Mexico, Brazil, Chile, Ecuador, Peru, Guatemala and Columbia. Metro CEO Per Mikael Jensen commented: "Latin America has grown in importance to Metro and now accounts for over 25 percent our business. Latin America is also core to our strategy for growth and with Puerto Rico in the portfolio we can leverage on Metro's strong position in the market and provide clients and agencies with the best possible advertising solutions and services." The Puerto Rico print edition will be hand delivered by distributors Monday to Friday at strategic locations to reach the target audience. A joint venture company has been created together with PR Media Partners LLC, in which Metro holds 70 percent of the shares. PR Media Partners LLC is formed by local and international investors to pursue investment opportunities in the Puerto Rican media sector.

» Financial Times bets on Brazil
The Financial Times  is making what it calls "a significant expansion into the Latin American market" by launching a newspaper in Brazil, a new Latin America page on its website and a mobile app for the region, The Guardian reports. The newspaper – printed in São Paulo – will be available for subscribers and retail vendors in São Paulo, Rio de Janeiro and Brasilia from tomorrow (3 October).  The FT's chief executive, John Ridding, said the print site launch "underscores our belief in a healthy future for print" and spoke of the other innovations as an affirmation of "Latin America's emergence as a major centre for global business and finance.

» US$ 62 million for E-mail service provider
E-mail will continue to be one of the main forms of digital communication, if not the main. At least that is what venture capitalists believe. New York's Insight Venture Partners recently led a $62.2 million investment into Mimecast, a cloud-based email management service, a single platform combining archiving, anti-spam, security and other features. Mimecast is expected to finish the year with $50 million in revenues, The Wall Street Journal reports

An insider recently told Portada, “For clues on the approach of the private equity and venture capital community to the current economic downturn, look at a presentation about start-ups and the economy by VC firm Sequoia Capital.”

One slide, in which Sequoia provides advice to the CEO’s of its portfolio companies, contains the following bullets points: 

  • Perform Situation Analysis
  • Adapt quickly
  • Use a zero-based budgeting approach
  • Make cuts
  • Review Salaries
  • Employ a heavily commissioned sales structure
  • Bolster Balance Sheets
  • Become Cash Flow Positive as soon as possible


The above bullet points show reasons why smaller, private equity/VC  backed  Hispanic media and Advertising firms are in a relatively better position to weather the downturn than many of the larger leveraged ones.

For starters, smaller companies can not leverage themselves like some of the larger ones can due to the fact that they tend to be smaller/more risky propositions.  As Hispania Capital Partners Managing Partner Victor Maruri tells Portada, “companies that are not highly-leveraged have more options. Private equity funds last 10-12 years. They invest in companies because of their growth perspective and don’t bet so much on leverage to increase their ROI.” Debt-to-Equity ratios for these types of companies range from 0.5 to 1.

In addition, many of these companies are positioned in attractive sectors (Multicultural Research, Digital Media) that are growing despite a flat to negative general market growth outlook.

Batanga: Conservative Approach

Batanga is not planning any drastic changes to the organization, Portada has learned. The online, live events and publishing company whose main investors are Tudor Ventures out of Boston and HIG in Miami, has been relatively conservative from its inception. 

Having said that, Batanga is trying to find ways to conserve cash without sacrificing the product and still be placed for significant success when the economic cycle turns up.

Batanga’s investors are also open to new acquisitions (Batanga bought online ad-network Hispano Click in January). In economic downturns, acquisitions often can be found at interesting prices.

Impremedia: Goldman Sachs credit line

How is Impremedia doing? “Basically the same as any other advertising supported business. We expect revenues to remain soft for some time to come and are and will continue to take appropriate measures to make it through the cyclical downturn, however deep and prolonged it may be,” says Daniel Jinich, Managing Partner of Acon Investments, a Washington DC private equity fund that has a stake in Impremedia.

Impremedia has a $82.5 million credit facility with Goldman Sachs Specialty Lending Group, an  investment platform dedicated to providing financing solutions to middle market companies based in the US and Canada. This is a relatively low amount of debt for a company the size of Impremedia. Impremedia has been using the credit line to acquire other media properties (e.g. Rumbo at the end of 2007) and expand its digital offerings through portal Impre.com.

Todobebé: Multiplatform strategy

Todobebé, a multi-media company dedicated to the Hispanic and Latin American parenting Market, got a $15 million investment from NYC-based  private equity firm Palladium Capital Partners last January. As other smaller companies Todobebe does not have major funding problems. Exposure to the Latin American market may also diversity its risks.

Last week, the company announced that it is bringing its hit parenting show "Viva la Familia!" to Mexico in a deal with Televisa.

QuePasa: The only public equity play 

The bilingual portal and Hispanic social network, which also offers its services to the Latin American market is the only “smaller” company in the Hispanic media market that is publicly quoted (Nasdaq).  Disclosures to the investor community show that last January the company borrowed $7,000,000, including $5,000,000 from a company controlled by one of our non-employee directors. The notes are due in 2016;

Banner Advertising Revenue make up 80% of QuePasa’s revenues, while subscriptions sales related to the Internet dating service Corazones.com  make up 20%.

QuePasa’s revenues are still low.  According to a statement released last Friday the reason for low revenues is the following: “In September 2007, QuePasa  launched a new beta version of its website, which experienced technical difficulties and performance issues that adversely affected its amount of traffic. In late October 2007, a new senior management team was put into place and immediately began to address the performance issues with the website. The bulk of the banner advertising campaigns were discontinued in the fourth quarter of 2007, and efforts to generate additional banner advertising campaigns were temporarily put on hold while emphasis was placed on enhancing the functionality and the content of the website, in order to drive sustained traffic to the site. In February 2008, it re-launched its website and experienced a 222% increase in page views during the second quarter of 2008 from the first quarter of 2008, and a 316% increase in page views during the third quarter 2008 from the second. QuePasa is hopeful that website traffic will continue to increase in the fourth quarter of 2008 and believes that there will be a direct correlation between website traffic and its ability to increase revenue.

Next Monday: A review of Meredith, LatinForce, McClatchy, Belo, News Corp., Gannett and others.

Related Article: How will Latin American and Hispanic Companies Fare in the Current Credit Crunch?


  • Advertiser advises publishers to do their home-work: In a panel on print media buying, Marsha Lawrence, print media manager at Best Buy Corp. advised publishers to work hard to get advertiser's attention. In particular, she recommended that publishers answer the following questions when presenting their publication as a viable advertising vehicle to retailers:
  1. How does the distribution geography of the publication align with store locations?
  2. How does the Hispanic market spend in the advertiser's product/service categories?
  3. How does the advertiser currently serve the Hispanic market (In-store, shopper demographics?
  4. Audience reach vs. other media (TV, radio etc…), Audience reach vs. non-Hispanic newspapers.
  • Lawrence pointed out that Hispanic publishers should expect to charge lower rates than general publishers, because their publications are a supplement to general market buys. However, Robert Armband, Publisher of Chicago's La Raza noted that Hispanic publications are the "primary buy" in zip codes that are heavily penetrated by Hispanics.
  • Best Buy's Lawrence emphasized the importance of in-depth research about each publications use by shoppers.
  • In a Roundtable about “Publishers' Best Practices,” Zeke Montes, Publisher of Chicago's Teleguía, El Imparcial and the new Guía Telefonica advised publishers to resort to bank loans as opposed to venture capital financing: “Venture capitalists want 35% ROI (return on investment) and take over your company; with bank-loan financed growth you can remain 100% owner of your company,” Montes noted. Ray Guerrero, of San Diego's El Latino emphasized the importance of profit-sharing to encourage employees working at Hispanic publications. Eddie Escobedo, Publisher of El Mundo in Las Vegas, noted that it is essential to provide local news and inform about the community. “99% of our content is local,” he added. Alberto Avendaño, Editor of El Tiempo Latino (Washington D.C) also said that “commitment to the community” is crucial. Bob Allan of Panorama in Fort Worth Texas noted that “Hispanic newspapers often look the same.” He encouraged publishers to be more creative about their publications layout and content. Jose Zepeda, Publisher of El Aviso in Los Angeles stressed the importance of a good organization for a publication's growth.
  • Al Día Philadelphia Launches “Al Día Writer's Group.” Hernan Guaracao, Publisher of Al Día announced the launch of a writers' syndication service. The content will be focused on issues relevant to Hispanics. The service will produce op-ed pieces, feature articles, investigative reports and cartoons. It will start with a group of 5 writers including Wendy Hess who will write about immigration rights. The service will be marketed to Hispanic newspapers and other media outlets, including general market media. “This is an effort to move beyond hard news and provide informative and thought provoking fresh copy,” Guaracao said.
  • According to recently published research by the Newspaper Association of America, 83% of Hispanic adults use newspaper Inserts (Preprints or Free Standing Inserts-FSI's)
  • Wal-Mart Stores, Inc. and the National Association of Hispanic Publications (NAHP) launched a membership expansion and professional development initiative to enroll150 new member publications from across the country and encourage former members to rejoin the association. “Hispanic publications play a vital role in keeping their communities connected to local and national events. But they're also a bridge to the Latin American countries that many of their readers still call home,” according to Wal-Mart's Director of Hispanic Markets Pepe Estrada. “From civic engagement campaigns, to homeownership information, to health fairs, and just your basic classified ads, Hispanic publications are active members of the communities they serve.” As part of their $60,000 donation to the program, Wal-Mart will sponsor first year dues for participating publications as an incentive to join NAHP. The funding will also be used by the Association to develop new membership materials, membership management software and interactive membership tools on NAHP's website.

Publishers, advertisers and service providers to the print media industry met in Las Vegas last week at the 2006 National Association of Hispanic Publications Convention & Expo. The followingare the most important news and insights obtained during the 3-day conference:

A report on last weeks closing of Miami based publisher Zoom Media Group based on Portada® and third party interviews.

Why did Zoom Media Group fold?

Last Wednesday, 5-year-old Zoom Media told its roughly 25 employees they were fired. Venezuela's Manduca Media, which bought approximately 60 percent of Zoom Media and assumed management control two years ago, had decided to stop investing in the company. Manduca owns El Universal, one of Venezuela's largest daily newspapers.

“There has been no official word from the shareholders on the reasons for this decision and there was absolutely no advanced warning given to employees or the advertising community,” said Zoom Media Group's advertising director Alonzo Smith. “I have been advised that it is closed and I no longer have a job,” said Smith.

Will Loft and Poder stop being published?

Sources at Zoom Media Group interviewed by Portada® said it was unlikely that Loft and Poder would continue to be published. “I haven't received any information regarding future issues – I'm told the operation has ceased,” says Zoom Media Group's Alonzo Smith. “We don't know if the company is being dissolved, sold or what,” Rosa Alonso, group publisher of Zoom Media Group, told The Miami Herald.

However, Isac Lee, chief editor of Loft and Poder, said he remains optimistic that the magazines can still be salvaged. “There are media tycoons who understand the value of a having a good editorial team and an established space in the Hispanic market,” he said. “The important thing is the people. Talent is mobile.” A growing number of venture capital and private equity funds are looking to invest in Hispanic media. A publishing platform like Zoom Media Group could attract strategic or financial investors.

How were Loft and Poder magazines doing?

Both magazines were still in the red, but were growing considerably according to Alonzo Smith. “The advance sales for the October issues promised the largest advertiser supported editions ever.”

Loft had recently acquired large national automotive accounts (Mercedes Benz) and Poder had recently won the Merrill Lynch account. (The asset management house advertised in the July/August and September issues). During the period from April 2004 to March 2005, Poder's Miami edition increased advertising revenue by 441.2% to US $929,800 compared to the prior year, according to HispanicMagazineMonitor. Poder's U.S. edition had increased ad-sales by 446% to US $916,200.

Advertising director Alonzo Smith said he worked hard to turn these magazines, originally dependent on Miami real estate and local venues, around. “It became my obsession to build and expand national advertising. I was confident that we had turned the corner to success. Sales were going strong,” says Smith. “We were focusing on growing circulation in key markets in order to move away from the perception of the magazines as Miami publications. We were being audited by ABC and shifting from proprietary research to syndicated research. In the last six months all of these areas had been addressed and both magazines were just now breaking the all important 100,000 circulation mark that makes advertisers respect publications as serious players in the magazine business,” says Smith.

Earlier this year, Mexican publisher Editorial Televisa teamed up with Poder's Mexican edition and had recently increased the magazine's frequency to biweekly.

How did Zoom Media Group start out?

Zoom Media was founded in 2000 with $4 million in start-up funds from Wall Street venture capitalists and private investors. Its goal was to chronicle the Latin American Internet explosion with the magazine punto-com, which means dot-com in Spanish. With the Internet boom bust, the company changed the name of punto-com to Poder, which was initially published in Spanish for the U.S., Mexican, Colombian and Venezuelan markets. Later two English editions – a U.S. national edition, as well as a Miami edition – were added. In 2002, Zoom launched Loft, a U.S. and Latin American glossy men's magazine.

How does this affect the Hispanic magazine publishing market?

In the midst of a booming Hispanic publishing market, Zoom Media Group's closure is the second major loss in the U.S. Hispanic market this year. In the spring, Conde Nast announced that it would stop publishing U.S. Hispanic editions of its magazines and move the bulk of its Spanish-language operations to Mexico City. The possible closure of Loft and Poder is good news for the competition in the business (Poder) and lifestyle magazine categories (Loft). Business magazines targeting Spanish-speaking audiences include Hispanic Business and Latino Leaders Magazine.

Editorial Televisa has announced plans to launch Tu Dinero this fall. The Mexican publishing house is also a majority owner in two business oriented publications: Hispanic Trends and Hispanic Magazine. Poder's main competitors in the Latin American (panregional) business magazine market are Latin Trade, Latin Finance and America Economia. LOFT competes with an increasing number of lifestyle magazines targeting Hispanic men.

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