Axios, valued at $525 million, will be sold to Cox Enterprises in a major media deal

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Cox Enterprises said Monday that it has acquired majority control of Axios, a five-year-old digital news company based in Washington.

The companies did not announce how much Cox paid, but the Atlanta-based publisher will own 70 percent of Axios, which the two sides say is worth $525 million.

Axios’ three founders and their employees will retain about 30 percent ownership. The company has around 500 employees spread across various operations and cities, including Axios Headquartersa communications software company.

The sale is a big payday for Axios investors, including employees and founders. The site launched in 2017 and quickly became a provider of news and analysis on politics, government, technology, and media. Axios also struck television deals with HBO and MSNBC, giving it an immediate promotional boost.

Axios’ early investors included NBCUniversal and the Emerson Collective, the private corporation founded by Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs. (Emerson bought majority control of Atlantic magazine in 2017 and has a stake in Gimlet Media, a leading producer of podcasts.)

Cox, a 124-year-old media company, had already been a minority investor in Axios before the sale, which is the second major transaction involving a Beltway digital news company in the past year. In October, German publisher Axel Springer bought Arlington-based Politico for $1 billion after discussing an offer to buy Axios.

One of Axios’ co-founders, CEO Jim VandeHei, was also a co-founder of Politico but left the company in 2016 due to a management dispute. VandeHei, a former Washington Post reporter, launched Axios the following year with two Politico alumni, columnist Mike Allen and digital strategist and business manager Roy Schwartz, who is the president of Axios.

The three co-founders will remain in their current roles at the company, Cox said in an announcement Monday morning. They will also fill three of the seven seats on the board.

Axios, which uses a crisp format in its articles it calls “Smart Brevity,” is one of the few successful digital news startups in recent years. The digital media sector has been swarming with new entrants over the past decade, but even well-funded titles have struggled to find a steady audience and revenue in a business dominated by giants like Facebook and Google. The pandemic has exacerbated the difficulties and uncertainty surrounding digital advertising.

Not so for Axios, which turned profitable two years after its inception, according to Dallas Clement, Cox president and chief financial officer.

“Obviously the media has been through a variety of disruptions in the last few years,” he said in an interview. “We have been looking for new models [and] we think Axios brought something new to the table.”

“What Axios does is different” from its competitors, he added. “He does real reporting of real stories.”

Axio’s website attracted 19.4 million unique visitors in June, according to ComScore, putting it far behind leaders like CNN.com (122.0 million) and the New York Times (87.9 million), but ahead of digital news offered by legacy organizations like Time (14.6 million) and ABC News (14.3 million). The Washington Post website attracted 64.8 million unique visitors in June, according to ComScore.

Axios also publishes newsletters and local news sites in 22 cities, with plans to expand to dozens of other cities.

The stars of the company are Allen, another former Post reporter who started the popular Playbook column while at Politico; and Jonathan Swan, who broke numerous stories as a White House reporter and conducted probing interviews with newsmakers on Axios’ weekly HBO show.

“We have found our kindred spirit to create a great, reliable and consistent media company that can outlive us all,” VandeHei said in a statement Monday.

Cox is a private company, closely controlled by the descendants of its founder, James M. Cox. His extensive media holdings include cable television systems, television stations, and newspapers such as his flagship, the Atlanta Journal-Constitution. It also operates an automotive division that owns Autotrader, Dealer.com, and Kelly Blue Book.

Axios’ estimated value is similar to that of another digital startup, sports journalism site the Athletic, that The New York Times bought for $550 million earlier this year.

Clement said he expected the sale to close within the next two months.

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