Other backers from last year also increased their investment, including NBCUniversal, Laurene Powell Jobs’s Emerson Collective and Wal-Mart Chairman Greg Penner. WndrCo, a media-and-technology firm founded by Hollywood executive Jeffrey Katzenberg, is a new investor in the round.
Axios plans to use some of the financing to expand its capacity for data analysis, product development and audience growth, as well as developing new coverage areas, said Mr. Schwartz, Politico’s former chief revenue officer. By the end of 2018, Axios plans to have roughly 150 staffers, up from its current staff of 89.
When Axios made its debut in January, Mr. VandeHei said the company would introduce a high-end paywall, help fix what he called a “broken” media business, and create smart, short content and newsletters aimed at corporate executives and other professionals. The Axios website resembles Facebook’s news feed, with a chronological stream of concise articles on technology, politics, business and health care.
Today, there’s still no paywall. Mr. VandeHei says that has been put off until late 2018, in part to allow the company to continue to build its audience with the free site.
Advertising and audience growth have beat expectations, the chief executive said, so “we’d be insane not to pour all of our effort into building that audience.”
According to a person familiar with Axios’s pitch to investors, the company brought in more than $10 million in revenue in its first seven months, mostly through short-form native advertising that appears in between stories.
Delaying the subscription service means the startup will continue to rely on advertising to drive revenue at a time when many larger digital news organizations are struggling to scale native advertising and maintain ad revenue growth rates overall.
Troubles in the online ad business are making it tough for new-media upstarts to maintain high growth rates and live up to lofty expectations. On Thursday, The Wall Street Journal reported that BuzzFeed and Vice Media are on track to miss their revenue targets for this year. Mashable, meanwhile, has agreed to sell itself to trade publisher Ziff Davis for $50 million, according to people familiar with the matter—a fraction of its $250 million valuation in March 2016.
Axios’s Mr. Schwartz said the company has already persuaded 10 of its advertisers, including Boeing Co. , to renew in 2018 and has five new advertisers booked for next year.
Although the Axios audience is growing, it still lags behind some of its competitors in and around the nation’s capital. Axios attracted more than six million unique visitors in September, according to comScore. That same month, Politico drew more than 20 million unique visitors, the Washington Post topped 95 million, and Breitbart had more than 13 million.
Mr. VandeHei said those are encouraging numbers, given Axios’s relatively recent launch and small staff. “Ten months in, by all the measures that we look at, we’re doing better than we thought going in,” he said. “This inspired us to expedite our plans—and put our foot on the gas.”
Axios is infused with some of the take-no-prisoners doctrine that defined Mr. VandeHei’s Politico tenure, as the outlet fights to land the most influential interviews and breaking news that will make it a must-read inside the Beltway and around the country.
The walls of its offices are adorned with quotes like: “Suck rolls downhill” and “Brevity is confidence. Length is fear.” There are softer touches, too: a blue couch under a sign labeled “Relaxios” and baskets of candy beneath a sign labeled “Snaxios,” refilled each week by co-founder and executive editor Mike Allen, who also joined Axios from Politico, where he was chief White House correspondent.
Raju Narisetti, a digital news veteran who has worked for the Journal and Washington Post and is now the chief executive of Gizmodo Media Group, says he reads Axios but that it’s still too early to make a definitive judgment on the company’s business or editorial success.
“Axios has certainly made great use of its co-founder [Mike Allen] and its $10 million financial runway to create awareness and a reasonably strong impact for the first year of a newsletter-centric media startup in D.C.,” Mr. Narisetti said. “Has it become ‘Economist mated with Twitter ’ that it apparently wants to be? The jury is still way out on it.’”
Axios says it now has 200,000 subscribers across its 11 newsletters, with an average open rate of 52%, and Mr. Schwartz said its readers are highly engaged and belong to demographics that are valuable to advertisers.
The company is planning to expand into other formats, including a smartphone app Axios expects to launch in 2018 and the exploration of a podcast program, said Alexis Lloyd, chief design officer. The company also expects to double the size of its video team, Mr. VandeHei said, and may branch out into five-second video advertisements.
Corrections & Amplifications
E.ventures co-led Axios’s second funding round with Greycroft Partners and Lerer Hippeau Ventures, making it a new investor in the media startup, along with WndrCo. An earlier version of this article didn’t mention e.ventures’ role and incorrectly said WndrCo was the only new investor in the round, based on information provided by the company. (Nov. 17, 2017)