Nyhedsavisen bailed out by venture capital

After weeks of speculations of whether the end was near for Denmark's most read newspaper Nyhedsavisen, it emerged yesterday that American venture capital Draper Fisher Jurvetson (DFJ) had come to the rescue.

 

Even though Morten Lund, the majority owner and previous early stage investor in Skype, said in a press release last week that a new ownership had been agreed, a new "world class" investor would back the paper and the delayed accounts would be handed in, details of the new ownership structure surfaced until yesterday and according, to Berlingske, the accounts were subitted Friday 1/8.

 

The accounts äre reported to be delayed because the accountant demanded that money to secure the freesheet's future had been transferred to a company account before he signed it. DFJ is reported to have invested an undisclosed but substantial sum in Morten Lund's company ML Medie ApS, enabling Lund to increase his stake in Nyhedsavisen from 51 to 85 per cent, while Icelandic Stodir Invest retain 15 per cent. Lund has previously said about £15m (150m DKK) was needed to bring the freesheet in the red.

 

"We are proud to do business with Morten Lund, and since we have been investors in Hotmail and Skype, it's not new a new thing for us to provide a free service to challenge the established market," Tim Draper, the founder of DFJ said in a press release announcing the partnership. "Personally, I'm always looking for something that can turn an industry upside down," Draper said on a previous occasion when asked what kind of ventures he likes to invest in.  

 

How well doesn't that rhyme with what Jon Asgeir Johannesson, Baugur's main man, said in an interview with Börsen, the Danish financial daily (who annoyingly keep a lot of their content locked away behind pay walls), at the very start of the country's freesheet war in 2006:

 

"In the future there will be millions of websites and TV- and radio stations, but there will only be a few newspapers left and they will be a platform for advertisers who want to reach a wide audience."

 

It was always Nyhedsavisen's ambition to turn the newspaper market upside down by challenging the paid for dailies with a "quality freesheet" - modelled on Icelandic Frettabladid. And, despite its financial difficulties, one must admit that by becoming the country's most read newspaper in such a short time, it has accomplished this - though venture capital firms are not known to be very patient investors, so doubts of the newspaper's financial foundation will linger.