Semafor CEO Justin Smith’s Cautious Spending Strategy

The media company has appeared to defy the odds by beating major publishers to scoops, hosting more than 30 events in less than a year, and raising an additional $19 million in May.

Justin Smith stands behind a podium.
Justin Smith at the Semafor Media Summit. Getty Images for Semafor

Semafor’s spending strategy can be summarized as slow and steady. Despite approaching its first profitable months soon, Semafor isn’t in any race to scale its business, said Justin Smith, co-founder and CEO, on a recent podcast with Press Gazette.

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“Our plan is to monetize that initial investment as effectively as possible and bring the organization to a sustainable, profitable model before expanding beyond that,” he said. “We have a significant portfolio of products now, a powerful audience and lots of inventory and opportunity to monetize.”

Justin Smith founded Semafor in October 2022 with Ben Smith (the two are not related). Justin previously worked as Bloomberg Media’s CEO, and Ben has written for the New York Times and edited BuzzFeed. They launched the news site with ambitions of reaching 200 million college-educated English speakers worldwide, which is more than 20 times the number of subscribers to the Times.

Semafor launched in the middle of an economic downturn, with advertisers hitting the breaks on spending and major layoffs scouring the industry. Within the last year, a series of publications have shut down entirely, including Protocol and BuzzFeed News, Ben’s former employer. Semafor has appeared to defy odds by beating major publishers to scoops, hosting more than 30 events and raising an additional $19 million in May, during one of the toughest fundraising environments in recent history.

The executives had set out to raise $10 million to replace the money invested by Sam Bankman-Fried (SBF), the FTX founder suspected of fraud. Semafor didn’t intend to raise more than the amount necessary to recoup SBF’s investment, Justin said in the podcast. But the U.S. has been on the “edge of a recession” for two years, so the executive team decided to capitalize on the demand while they had it. The investment brings Semafor’s total funds to $34 million. Its plan is to keep the money earning high interest in the bank and spent cautiously, Justin said.

What is Semafor’s revenue breakdown?

Semafor is a private company, so it doesn’t have to disclose its revenue. But in May, Justin told the Times his company earned $10 million in 2023. Half of that comes from advertising and half from events, he said in the podcast this week. Some of those events had profit margins of up to 75 percent, but all have been profitable for the company, he said. While these numbers may not remain static, they do signal that events can be one of the “most exciting and most profitable” legs of journalism, Justin said. In recent months, Semafor has hosted summits focused on media and the world economy.

The company does rely on some advertising revenue, but not in the form of programmatic ads—which many (including Justin) believe contribute to a worse user experience. Semafor reaches between 4 and 5 million monthly readers, an audience comprised of C-suite executives and other influential business leaders. Because of its high-value audience, Semafor has attracted premium advertisers, including Mastercard. Semafor has more than 300,000 newsletter subscribers, 19 percent of whom are in the C-suite, according to Justin. The company doesn’t see a subscription model in its short-term strategy, though it will eventually implement a paywall, he said.

Who is Justin Smith?

In addition to working as CEO of Bloomberg Media, Justin, 53, has spent time at Atlantic Media, The Week and The Economist. At The Week, Justin helped launch a U.S. version of the magazine before being promoted to president. He spent six years at the company and earned a spot on AdAge’s 40 Under 40 list while president. In 2007, he joined The Atlantic as president and was later promoted to president of Atlantic Media Company, the parent company overseeing National Journal and Government Executive. Under his leadership, Atlantic Media Company founded Quartz. Smith turned a profit for The Atlantic for the first time in more than a decade. He worked as the CEO of Bloomberg Media—overseeing digital, television and Businessweek properties—for eight years until founding Semafor.

Who is Ben Smith?

Ben, 46, is Semafor’s editor-in-chief. Prior to its founding, he was a media columnist at the Times for two years. He also spent eight years as the editor-in-chief of BuzzFeed News. During his tenure there, he helped build out the company’s investigative journalism unit, which won a Pulitzer Prize after Ben’s departure. He also worked as a reporter for five years at Politico, during which he covered the Democratic presidential primary. Earlier this year, he published his first book Traffic, about the rise of digital media and race to go viral.

Semafor CEO Justin Smith’s Cautious Spending Strategy