Contxto – As the industry landscape becomes financially harsher on media outlets, a new spark of hope has suddenly risen. JOTA, a media-tech startup from Brazil, recently closed a R$6 million (approximately US$1.7 million) investment round led by Astella Investimentos.
JOTA is a subscription-based digital publication focusing on Brazilian politics. Born in 2014, the company started out by exclusively covering judiciary-related news. Eventually, it expanded and started covering executive and legislative matters as well.
“In the last ten years, we have seen a profound change in journalism and the media sector with people having a harder time giving value to the content, distinguishing what is trustworthy and what is not,” said Laura Constantini, partner and co-founder of Astella, told the Knight Center.
“We looked at various types of media/content companies and what we found interesting in JOTA is that they have a group of customers with great appreciation for the product.”
To date, JOTA has been surviving off of the founder’s capital injections and reinvestment of earnings. In 2017, the company generated over US$936,000. The following year, it wrapped the year up with US$1.55 million approximately, according to Felipe Seligam, JOTA’s co-founder.
As a venture fund mostly focusing on technology startups, Astella’s support comes in handy as the company broadens its scope to go beyond traditional journalism. Data science is now what the founders are aiming for. They’re certainly going to need a large team of brainiacs to accomplish that.
This new phase means that the JOTA will eventually become a full-stack media tech company. As of now, it has sold subscriptions for original content. Nevertheless, the startup wants to enter a more technical field to compete with consulting and technology companies.
The founders also want to sell a solution that assists readers in making more accurate business and legal decisions. Future government’s initiatives ultimately depend on these choices.
After revealing that JOTA’s mission is to “make public institutions more predictable,” Seligman believes that although journalism is powerful, it’s even more influential when supported by data science.
To achieve this, the startup aims to use Astella’s investment into building and hiring a great tech team, mostly comprised of developers and data scientists. JOTA Labs, the company’s data science laboratory, is the department aiming to create and train this new group.
Ultimately, the goal is to create a market intelligence platform capable of analyzing data, generating insights from the team of journalists, and presenting information to users in a clear and concise manner.
“We are going to a market that is more difficult than journalism, more difficult to deliver,” said Seligman. “Journalism is very important, but we are trying to expand the market. Journalism and science with journalism and technology.
“We will no longer simply report but try to predict what will happen. It’s not data journalism but data science. How to use journalism and science to predict.”
Things to consider
While still unclear on how JOTA is going to achieve this, this seems to be the most important goal for its future endeavors. Most likely, its scalability and potential are what attracted Astella investors the most.
What’s interesting here is that the model could be widely replicable elsewhere. Predictability in the news is a desired trait among governments, especially due to people’s ability to fact-check and confirm everything at a moment’s notice.
Uncertainty and newer generations are like quality scotch and Coke, they just don’t go well together. If the model works out well in Brazil, though, the startup could eventually launch abroad, too.
Although not the initial goal, which included more traditional practices, the new vision will enhance rather than replace. As technology becomes increasingly fundamental across various industries, new media outlets can also take advantage of opportunities without approaching it like competition.
Instead of merely generating opinions from journalists and their sometimes biased opinions, the software will allow readers to get more accurate, unbiased data to complement their readings. This way, readers will be better equipped to predict future scenarios based on facts rather than speculation.
“We are a successful case in an industry with more questions than answers,” said Seligman. “JOTA is not the solution to all of the world’s problems. Wanting to or not, it became a reference. But do we want to be the reference for the moment and not continue to learn? We have the opportunity to use this as a benchmark not just for media companies, but technology.”
Strengths and weaknesses
One of the greatest assets of JOTA recognized by Astella is its subscription base. In this sense, Barsotti sees a change of mindset that’s crucial for traditional communication companies to adopt. For a long time and even today, she said they have underestimated the needs of the audience.
Other people don’t seem to appreciate this deal in the same positive light. Patrícia Maurício, a professor in the communications department at PUC-Rio, questions this new step going forward, doubting that the new editorial processes will remain untouched.
“For a venture capital fund, I believe it is a good investment, but for internet journalism, I have doubts,” said Maurício, whose research focuses on the political economy of media outlets. “It is always good to have financial contributions to survive but the independence of outlets is compromised by those who pay.”
It’s not the first time we’ve seen media companies raise venture capital. While the concerns are legitimate, I believe it’s a matter or the media’s initial core values and ethical standards to prioritize readers’ interest above anything else. Tough job yet certainly manageable.