MEDIA: China’s ‘Business Insider’ Reels in SMG

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Bottom line: Wall Street Round-Up’s new venture funding from China Media Capital testifies to its rapid rise, using a similar formula to the popular US-based Business Insider financial news aggregator.

SMG backs Wall Street Round-Up

A fast-rising financial news website that looks like China’s answer to the popular US site Business Insider has just netted its latest funding, in the amount of a relatively modest 100 million yuan ($15 million). But what’s attracting the biggest interest in this story is the source of the funding, which is coming from China Media Capital (CMC), the new media investment arm of the aggressive Shanghai Media Group (SMG).

As a member of the media, this story is of particular interest to me because of the controversial nature of the funding recipient, called Huawerjie Jianwen, or roughly Wall Street Round-Up. The company was founded as a financial news blog in New York in 2010 by a group of young entrepreneurs, but its rapid rise didn’t begin until they returned to China in 2013 and re-registered the company here in Shanghai.

The company’s true rise started in 2014 with the roll-out of its popular app, and it has gone on to become one of the most popular providers of financial news on the traditional web and mobile Internet. But equally interesting is how this company has attracted the ire of other major financial media, who complain that Wall Street Round-Up is a parasite that simply aggregates and repackages their news and makes big money from it.

Let’s begin with the latest headlines, which simply have Wall Street Round-Up announcing the 100 million yuan in new funding without disclosing the source. (Chinese article) But all the reports also cite CMC as the source, meaning the leak is probably coming directly from the publication’s top management and also CMC’s aggressive chief Li Ruigang.

This particular investment is one of the smaller ones for CMC, whose stable of joint venture partners includes many top western media companies such as Warner Bros (NYSE: TWX) and DreamWorks Animation (NYSE: DWA). The company also has ties to Rupert Murdoch’s Twenty-First Century Fox (Nasdaq: FOX), and I’ve previously said I suspect that pair will announce a major new film-production tie-up later this year.

Financial Media Investments

This particular investment looks somewhat similar to another tie-up that Li Ruigang helped to engineer last year with e-commerce leader Alibaba (NYSE: BABA). That deal saw Alibaba and SMG’s China Business Network (CBN) newspaper form a 1.2 billion yuan joint venture to produce data-driven financial news. (previous post) Hence Li may be trying to position that investment and this latest one perhaps to someday be combined into a new financial news alternative to big global names like Reuters and Bloomberg.

Wall Street Round-Up uses a similar model to Business Insider, in that neither does much of their own reporting and instead rely on aggregating, repackaging and analyzing financial news from other sources. That has led other media here in China to call Wall Street Round-Up a parasite, and there’s no doubt the attention is largely due to the huge success the app and website have enjoyed in their brief history.

The prominent and highly respected Caixin, one of China’s leading financial media, has openly accused Wall Street Round-Up of copyright infringement, which carries the implicit threat of a lawsuit. My sources at other major financial media say they are also unhappy that Wall Street Round-Up uses their news in its reports, even though such practice is quite common worldwide when one media breaks a big exclusive story.

Caixin has been a ground-breaker in defending its copyrights, in a country where media often engage in the illegal practice of copying each other’s reports verbatim. But in this case I do think Caixin and the other financial media will have less legal foundation for accusing Wall Street Round-Up of copyright violations, since such re-writing and news aggregation is accepted practice globally. Accordingly, Wall Street Round-Up could be a new media company to watch, and other more traditional media might be wise to studying its business model rather than complaining about it.

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