Digital publisher Mic Network Inc. has agreed to sell itself to women-focused publisher Bustle Digital Group for about $5 million, according to a person familiar with the matter—a fraction of Mic’s valuation less than two years ago.
Mic laid off almost all of its employees ahead of the sale, another person familiar with the matter said. Mic co-founder Chris Altchek informed employees of the layoffs during an all-hands meeting Thursday, the person said.
Bustle plans to reinvest in rebuilding Mic’s editorial staff in 2019, according to a third person familiar with the matter.
The selling price is a fraction of Mic’s $100 million valuation based on its investment round announced in April 2017.
Bryan Goldberg, the founder and Chief Executive of Bustle Digital Group, said in a memo to the company’s staff Thursday that acquiring Mic would position the company to better cover the presidential elections in 2020.
Mic publisher Cory Haik has resigned, she told employees in a memo that was reviewed by The Wall Street Journal. “Our business models are unsettled, and the macro forces at play are all going through their own states of unrest,” Ms. Haik wrote in the memo. “If anyone tells you they have it figured out, a special plan to save us all, or that it’s all due to a singular fault, know that is categorically false.”
Mic, like other digital-media outlets, has struggled to meet lofty investor expectations in a digital advertising market dominated by companies such as Facebook Inc., Alphabet Inc.’s Google and Amazon.com Inc. Many brands are wary of their advertisements appearing alongside news content, preferring lighthearted feature stories that skirt political issues.
Mic appealed to younger viewers and investors with its blend of reporting and opinion on topics including politics, entertainment, personal finance and beauty. The company raised more than $60 million in venture funding from backers including WarnerMedia Investments, Lightspeed Venture Partners and Advancit Capital.
But Mic’s readership declined in recent months, and financial pressures mounted as the company burned through its cash. Facebook recently told Mic it was ending a lucrative deal to create a show for its Watch platform, eliminating a crucial revenue stream, according to a person familiar with the matter.
Mic drew 5.5 million unique visitors in October, according to comScore , a 60% decline from the same period in 2016. Mic executives have long argued that comScore doesn’t accurately reflect the company’s total audience, which consumes its content on platforms such as Facebook and Twitter .
Recode earlier reported that Bustle was in talks to acquire Mic. The Journal first reported in September that Mic was considering an acquisition offer.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com