Axios is being sold to Cox Enterprises for $525 million

• Axios is being sold to Cox Enterprises in a deal worth $525 million.
• Both companies share an interest in expanding their local news coverage.

The media company Axios is being sold to its lead investor Cox Enterprises, Cox announced on Monday. The deal, which was first reported by The New York Times and Axios, is worth $525 million, according to a person with knowledge of the agreement.

"With so much happening in the world, Axios plays a critical role in delivering balanced, trusted news that people need," Cox Enterprises chairman and CEO Alex Taylor said in a statement. "Our company started in the media business, and we have always had a passion for journalism. Bringing a forward-thinking organization like Axios into Cox Enterprises is exciting for us on many levels, and we look forward to helping them continue to scale and grow."

Axios was launched in 2017 by former Politico reporters Jim VandeHei, Mike Allen, and Roy Schwartz, who will remain on the company's board. It's raised $57 million over four rounds, per Crunchbase.

Axios established itself with bullet-heavy newsletters aimed at busy professionals, later expanding to subscriber-paid editions, Axios Pro; and Axios HQ, a service to help big companies communicate internally. It had recently expanded its Axios Local line of newsletters into three new cities — Boston, Phoenix, and Salt Lake City — in an effort to strengthen local news coverage. It now has newsletters in 24 cities.

VandeHei said the deal came together after Cox Enterprises led Axios' last round of fundraising last year. Once connected, "They were definitely a big agitator to go bigger and go faster," VandeHei said. He said that Cox was particularly interested in Axios Local.

"Once it was clear that both sides were kind of kindred spirits, then it was pretty easy to actually go get a deal," he said. VandeHei said that Axios did not hire a banker and that there was no formal auction process.

Deal chatter has surrounded Axios for some time, however. Insider owner Axel Springer reportedly held talks with the company.

Cox will inject $25 million to help drive Axios' growth, a person familiar with the matter confirmed.

VandeHei said that he expected Axios to use Cox's investment to roll out new verticals of its Axios Pro paid product and expand in more cities. Axios will continue to operate as a standalone separate entity, VandeHei said.

VandeHei stressed that Axios, whose investors include NBCUniversal and Emerson Collective, was not under pressure to sell from its backers. However, as a venture-backed media company, eventually the company had to do a deal, he said.

"We're only five years in. The agitation starts in probably Year 8," he said. "Inevitably we were going to do a deal," he said, whether now or in the future.

The deal follows other recent blockbuster major media acquisitions, as some news companies faced headwinds during the pandemic.

Politico sold to Insider's parent company Axel Springer last year; BuzzFeed acquired Complex Networks last year; and Vox Media completed its purchase of Group Nine Media earlier this year, bringing PopSugar, Thrillist, NowThis, and more into its media umbrella that already included New York magazine and others.

Media companies like BuzzFeed that sought to capitalize on the SPAC craze and IPO have also seen those hopes dampened.

VandeHei said it was obvious that Axios should remain a private company given the struggles of media companies in the public markets. "With the 'known knowns' about media companies today, going public does not seem like an option," he said.

Despite the struggles facing the media industry, VandeHei said there is a "bright future" for those companies focused on a high-quality product to a distinct audience. He cited Morning Brew (which is majority-owned by Insider Inc.), The Information, Punchbowl, and Puck News.

"I think you are seeing a new maturity in terms of how people are approaching this," he said of those recently launched media companies.

VandeHei also batted down a persistent rumor among Washington journalists that he had political ambitions, and would use his financial windfall to fund a run for office in his native Wisconsin. God gave him one talent — media — and he would stay in that field, he said. "I am an Axios lifer."