Ozy Media has reversed the course and will not shut down, founder Carlos Watson said on Monday, the latest twist for the start of digital media that quickly collapsed after it exposed because he cheated Goldman Sachs into raising money.
“This is our Lazarus moment,” Watson said. Today show Monday morning, just days after it was announced it was going to close. Watson said talks with advertisers and investors over the weekend inspired him to keep Ozy going.
“I think Ozy is part of this moment,” he said.
Ozy’s fall has mesmerized the entertainment and media industry over the past week, as it has exposed the willingness of Silicon Valley investors to throw money into a vibrant online media market, with little evidence.
Watson claims the setback went too far and rejects comparisons to the founder of Theranos Elizabeth Holmes, which is currently on trial for the alleged fraud of investors and patients by making false allegations about the blood test technology and financial forecasts.
“When you saw people start naming me by Elizabeth Holmes, who never had a real product, who raised billions of dollars,” Watson said. ‘We have five newsletters to millions of people, a dozen TV series, including one that won an Emmy. This is not a card house. ”
Watson hired Ozy in 2013 as a youth-focused digital media venture, such as Vice and BuzzFeed, that would disrupt the journalistic venture. He has raised more than $ 80 million from investors, including billionaire philanthropist Laurene Powell Jobs, German media group Axel Springer and Marc Lasry, hedge fund manager and co-owner of the Milwaukee Bucks basketball team.
Watson offers a charismatic public face to investors, after attending Harvard and Stanford, working at McKinsey and Goldman Sachs and setting up a black-owned media group that would shake up the news industry.
However, a New York Times report last week revealed that co-founder Ozy Samir Rao is posing as YouTube CEO in an effort to raise $ 40 million from Goldman Sachs. The newspaper also raised questions about the true audience size of the company. Ozy said in 2019 that it will reach 50 million unique users per month, but data from Comscore, which measures online engagement, shows figures at a fraction of that level.
Within days, investors, advertisers and board members fled, trying to distance themselves from the crumbling brand. The board said Friday night Ozy would close.
Former BBC journalist Katty Kay has resigned amid allegations she calls “serious and worrying”. Lasry retired after just three weeks as chairman of the board, though he said Thursday he remains an investor in the company.
Before Ozy announced his closure on Friday, Axel Springer said he had not held a board seat since 2019, but that one CEO, Jens Müffelmann, had attended meetings.
“In light of current developments and accusations against Ozy, [Müffelmann] the CEO of Ozy decided yesterday and announced that he [is stepping] from this function, ”the company said.
Another early investor, Laurene Powell Jobs, of the Emerson Collective, also wanted to distance herself from the business. “Emerson did not participate in Ozy’s latest investment round and has not served on the board since 2019,” the company said last week.
Ozy has two remaining board members: Watson and Michael Moe, a venture capitalist.