Axel Springer Has a B2B Platform Play It Should Lean Into

By Jacob Cohen Donnelly • 6 hours ago
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While many publishers aspire to become true platform businesses, Axel Springer has one of the purest representations of it on the market today.

I’m talking about Morning Brew, a company where I spent three years. More specifically, I am discussing the Brew Professional Media division, a division I ran for three years. It fits all of the characteristics of a true platform play that, with some capital behind it, could become a much larger part of the total pie.

But let’s take a step back and define what a platform play is.

At its core, a platform is a media company that has reached some scale that you can acquire additional, smaller publications and bolt those on. But it’s not just about a larger media company acquiring a number of smaller assets. The goal is for the platform to become a foundation with technology, sales, operations, go to market, etc. to unlock additional value.

If you look at MB’s professional division, it has seven brands: CFO, Healthcare, HR, IT, Marketing, Retail and Tech. Combined, this business reportedly generated $25 million in 2024. It has already reached some decent scale without exhausting the total breadth of topics.

And if anyone thinks there aren’t a ton more topics, look at two sites. First, head over to Oracle and look at the 22 different industries it serves. Second, head over to Industry Dive and look at the 30+ sites that it has in its portfolio. Morning Brew has seven. Clearly room to grow.

So, why Morning Brew and not any of the other B2B publishers out there that have multiple brands?There are three reasons I’ve zeroed in on Morning Brew.

First, it’s very clean. Because it has not done any true M&A in its history, it’s not dealing with operational debt from other companies. It has a single suite of digital-only ad products that can be sold across any of the publications with an ops team that understands how to handle it—publication agnostic. There’s one audience team that can build segments across all of the publications. And it can roll out new brands easier than almost any other publisher out there. Most other publishers can’t say that.

Second, it’s growing. When I joined, that division was generating under $5 million in revenue. It’s 5x that size in 4 years. A big reason for that is the complete rebuild of its ad products over the last couple of years. People think of Morning Brew as a newsletter company, but only three of 12+ ad products are in the newsletter. The rest are much more traditional B2B offerings like lead gen, webinars and others. To sustain a $25m+ business even after that rebuild demonstrates staying power.

And third, it has the Daily newsletter. With 4.2 million subscribers, it can incubate a new vertical and from day one have a strong following. That means you go from zero to revenue generation far faster than other publishers can. Having that many millions of prospective readers, all who love the Morning Brew style, is a very good place to be.

The real opportunity is to start acquiring other publications because there is an arbitrage potential at play. Let’s assume that it goes out and purchases a publication generating $1 million a year in EBITDA primarily from marketing services. Collingwood estimated that a subscale (under $1m in EBITDA) marketing services-oriented brand might sell for a maximum of 8x—and that’s the max. A platform play with that same business model is worth 12x EBITDA. This multiple expansion happens because platforms offer operational efficiencies, proven scalability and more diversity of revenue.

And that’s before any growth. The two questions they have to ask are:

  • With the Morning Brew Daily’s audience, could it grow the audience?
  • With the full suite of ad products and a larger audience, could it grow revenue and EBITDA?

That’s the real magic here. It can take a business that is already generating $1 million in EBITDA and grow it to $1.5 million or $2 million. If so, what might cost at most $8 million to acquire would then be worth $18 million to $24 million in valuation.

There is a reason that Industry Dive sold for as much money as it did. It had a clean go-to-market, unified technology stack and central teams that could grow as it added more brands and growth. That’s why the NewsCred deal was so impactful in 2020. It could take the content agency and roll those product offerings out to the full portfolio. In 2019, when it sold to Falfurias, it was generating approximately $30 million in revenue. When it was sold to Informa in 2022 for an enterprise value of $525 million, that revenue had grown to over $110 million with a 30% margin. That’s how a platform can grow.

And I argue that Morning Brew’s professional division has the same potential.

The good news is, Morning Brew’s new CEO sees this opportunity. When AMO interviewed him after he stepped into the new role, Robert Dippell said, “Morning Brew has an opportunity to be way more of a platform business than people understand. They saw us as a small business years ago that was being added into Axel Springer’s portfolio, and I think over time, we could end up being a much bigger part of that value than people probably expect.”

He is thinking about the broader portfolio—and he could be right—but the absolute slam dunk is on the B2B side. Axel Springer should arm him with the resources to get aggressive here.