It’s taking a $31 million loss.
Elite Daily used to look like a digital publishing success story: Founded by a couple of twentysomethings in 2012, fueled by Facebook growth, then sold for many millions a few years later.
Now it is a cautionary tale: The owner of the Daily Mail, the publisher that bought Elite Daily in January 2015, says the New York-based startup has been a bust, and has written down all of its investment in the money-losing company, citing “poor performance.”
It is taking a $31 million loss in the process.
Elite Daily was one of several companies that figured out how to tap into Facebook to supersize growth a few years ago, generating clicks with high-volume, low-brow, dude-friendly content.
Jon Steinberg, who was running the Daily Mail’s U.S. operations at the time it bought Elite Daily, told Business Insider that buying the startup meant that “now we have 50 percent of all millennials in the U.S. coming to one of our sites.”
Steinberg left the Daily Mail a year later and is now running Cheddar, a video news startup.
Daily Mail and General Trust, the Daily Mail’s U.K.-based parent company, says Elite Daily continues to grow and that revenue increased 44 percent in the last year to $12.6 million. But “audience retention and revenue growth have been disappointing and losses have exceeded expectations,” leading to the write-off.
That’s a big switch from January of this year, when Daily Mail and General Trust CFO Stephen Daintith said the site was doing well, even though its traffic had decreased. Via AdAge:
“We’re … pleased with how Elite Daily is performing,”