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Podcaster Wondery Explores Sale for Hundreds of Millions

Lucas Shaw
·3 mins read

(Bloomberg) -- Wondery Inc., the company behind hit podcasts “Dr. Death” and “Dirty John,” has hired financial advisers to explore strategic options, including a potential sale, hoping to cash in on growing interest from technology and media firms.

Wondery is expected to garner at least $200 million if it pursues a sale and could fetch as much as double that, which would represent the biggest podcasting transaction to date, according to people familiar with the matter. Even the low end of that range is twice its valuation when Wondery announced a fund-raising round in June 2019.

The company’s revenue is up 75% from a year earlier and will surpass $40 million this year, said one of the people, who asked not to be identified because the matter isn’t public. The podcaster’s options also include raising more money or doing a deal with a special-purpose acquisition company, or SPAC, the person said.

Wondery could attract interest from a range of companies looking to break into podcasting. Record labels, streaming services and TV networks are all commissioning original series, hoping to tap into the growing audience for on-demand audio. Wondery has a pipeline of podcasts that could be turned into TV series, said one of the people, who asked not to be identified because the matter isn’t public.

Spotify Technology SA, the streaming-music giant, has emerged as the biggest buyer of podcasting studios, spending hundreds of millions of dollars on Gimlet Media, the Ringer and Parcast. Gimlet and the Ringer were both valued at more than $200 million apiece in those deals.

Other big companies have shown an interest in podcasting deals as well. That includes SiriusXM Holdings Inc., which agreed to buy podcast platform Stitcher earlier this year, and IHeartMedia, which owns the biggest network of radio stations in the U.S. and a large podcasting operation.

Founded in 2016 by former TV executive Hernan Lopez, Wondery has produced some of the most popular podcasts over the past few years. The company also handles distribution and advertising sales for dozens of shows that reach close to 9 million people a month in total, according to Podtrac, an industry researcher.

New App

Wondery isn’t purely dependent on ads -- the main driver of revenue in the podcast industry. About a quarter of its sales come from other sources, said the person. It recently launched a direct-to-consumer app, making it less reliant on the big podcasting platforms. Users can pay $4.99 a month for early access to shows and other bonus features.

The company’s investors include Greycroft Partners, Advancit Capital and Waverley Capital. Bloomberg LP, owner of Bloomberg News, has partnered with Wondery on the podcast “The Shrink Next Door.”

Wondery has already turned many of its podcasts into TV shows and could pitch itself as a fount of intellectual property. There are 16 shows in development that could become TV series, one of the people said.

Wondery faces two hurdles in its sale, however. The company doesn’t own the intellectual property for a couple of its shows, and Lopez is under a legal cloud. He has been charged with bribing soccer officials when he worked for 21st Century Fox. Lopez has pleaded not guilty.

(Updates with revenue details in third paragraph.)

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