Zoom gets $30 million expansion fund
March 5, 2009 by Dave Haynes
I hear two very different stories about the investment market, with one tale that money is next to impossible to raise, and the other that there is smart money out there and people are still writing cheques.
Zoom Media and Marketing falls into the latter track, with news that it just raised $30 million for the mostly digital expansion of its large lifestyle advertising network in Canada and the US, as well as for buying up other properties.
In a round of funding that would ordinarily be indicative of a hot Internet, or social media play, venture capital firm ABS Capital Partners has sunk $30 million in Zoom Media & Marketing, providing a tacit endorsement not just for the New York-based outdoor and experiential media company, but for the burgeoning digital out-of-home media sector. It also comes at a time when the economics for many media may be looking shaky, and when those funds could be used to expand Zoom’s digital footprint, especially via new acquisitions.
“We didn’t really need the money, but we did this for three reasons,” Zoom Chairman-CEO François de Gaspé Beaubien said. “The first reason is that this gives us some great partners who really understand this business, and who are doing deals 24/7. The second reason is that it will allow us to accelerate the ongoing expansion of our digital network. The third reason is to keep our powder dry. In these economic times, it’s nice to have cash on hand if a good opportunity comes along. It’s a buyer’s market out there.”
While he wouldn’t speculate on potential acquisition prospects, Gaspé Beaubien said Zoom’s plan for the near term is to focus on building out the lifestyle location-based vertical channels that are the heart of its digital network, including fitness, social/night life, and family-oriented venues.
“I’m not saying that in a year’s time we wouldn’t look at other verticals, but this is where we are focused right now,” he said.
Zoom currently operates digital media networks in more than 2,500 venues across the United States, as well as static indoor billboard advertising in more than 8,000 venues.
It’s great news and a nice counter-balance to some of the other news of recent days about network operators shutting down or in severe financial distress. The ad market is hardly booming for digital or any other platform, but some guys are seeing this as a great time to build out and also pick up complementary networks and new markets.
Over the last few months Zoom has picked up a couple of large health club networks and is starting to dominate that space, and it also acquired the company that was partnering with them on digital screens up here in the tundra.
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