Ozy Media reverses course and will remain open, founder declares

Ozy Media has reversed course and won’t shut down, founder Carlos Watson mentioned on Monday, the newest twist for the digital media start-up that quickly collapsed after it was exposed for deceiving Goldman Sachs in a bid to boost cash.

“That is our Lazarus second,” Watson instructed the In the present day present on Monday morning, simply days after saying that it will shut down. Watson mentioned conversations with advertisers and buyers over the weekend had impressed him to maintain Ozy working.

“I feel Ozy is a part of this second,” he mentioned.

Ozy’s fall has mesmerised the leisure and media business over the previous week because it uncovered the willingness of Silicon Valley buyers to pour cash right into a buzzy on-line media model with little to again up its assertions.

Watson claimed the backlash went too far and rejected comparisons with Theranos founder Elizabeth Holmes, who’s presently standing trial for allegedly defrauding buyers and sufferers by making false claims about its blood testing know-how and monetary projections.

“If you noticed folks begin to put my identify with Elizabeth Holmes, who by no means had an actual product, who raised billions of {dollars},” Watson mentioned. “We have now 5 newsletters that exit to thousands and thousands of individuals, a dozen TV exhibits together with one which received an Emmy. That’s not a home of playing cards.”

Watson pitched Ozy in 2013 as a youth-focused digital media start-up, resembling Vice and BuzzFeed, that will disrupt the journalism enterprise. He raised greater than $80m from buyers, together with billionaire philanthropist Laurene Powell Jobs, German media group Axel Springer and Marc Lasry, the hedge fund supervisor and Milwaukee Bucks basketball workforce co-owner.

Watson offered a charismatic public face for buyers, having attended Harvard and Stanford, labored at McKinsey and Goldman Sachs, and pitched a black-owned media group that will shake up the information enterprise.

Nevertheless, a New York Instances report final week revealed that Ozy co-founder Samir Rao had impersonated a YouTube government in an effort to boost $40m from Goldman Sachs. The newspaper additionally raised questions in regards to the firm’s true viewers dimension. Ozy in 2019 mentioned that it reached 50m distinctive customers a month, however information from Comscore, which measures on-line engagement, confirmed figures at a fraction of that degree.

Inside days, buyers, advertisers and board members fled, searching for to distance themselves from the crumbling model. The board on Friday evening mentioned Ozy would shut.

Former BBC journalist Katty Kay resigned amid the allegations, which she referred to as “critical and troubling”. Lasry stepped down from the board after simply three weeks as chair, although he mentioned on Thursday he remained an investor within the firm.

Earlier than Ozy introduced its closure on Friday, Axel Springer mentioned it had not held a board seat since 2019 however that one firm government, Jens Müffelmann, attended conferences in an observational capability.

“In mild of present developments and accusations in opposition to Ozy, [Müffelmann] has determined and knowledgeable the CEO of Ozy yesterday that he [is stepping] down from this operate,” the corporate mentioned.

One other early investor, Laurene Powell Jobs’ the Emerson Collective, equally sought to distance itself from the corporate. “Emerson didn’t take part in Ozy’s newest funding spherical and has not served on its board since 2019,” the corporate mentioned final week.

Ozy has two remaining board members: Watson and Michael Moe, a enterprise capitalist.

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