Sprouter Inc. has sprouted wings again.
The Toronto-based social media site for startups has been acquired by Postmedia Network Inc., resurrecting Sprouter just two months after its surprise announcement that it was folding after two years online.
Financial terms were not disclosed for the acquisition, which will allow Sprouter to keep operating with the same name, content focus, social media format and team, including founder Sarah Prevette.
“The branding, leadership, team – everything stays the same. For our users it just means we’ll be able to continue on with plans we had and we’re excited to work with the Postmedia team,” Prevette says.
Sprouter launched in 2009 under the name RedWire as a Twitter-style messaging service for entrepreneurs, but retooled in March this year to focus more on a Q&A style model allowing startups to ask questions andget advice from various business experts.
In a July blog post, Prevette wrote that Sprouter was shutting down “due to capital constraints” and told ITBusiness.ca in an interview that month that she had foregone drawing a salary for over a year to help keep the site going financially. In a blog post later, a key Sprouter team member hinted that big news was forthcoming without revealing the Postmedia deal unveiled today.
In an announcement on its site today, Sprouter says it will keep hosting Sprout Up events for startups and entrepreneurs, maintain the Sprouter Weekly publication highlighting startup news, and continue its online Q&A feature. Though the announcement hints at “new initiatives” to come, Prevette provided no details about changes to the site, saying only “we’re working on other ideas we’ve had that we can further explore. It’s early days yet.” Although Sprouter plans to hire more people, mostly in business development to bring on more sponsors and partners, Prevette did not provide estimates of how many staff the firm plans to take on.
It’s not clear yet exactly how Sprouter will be integrated into the Postmedia empire, which includes the flagship Canada wide daily newspaper the National Post and other major paid dailies such as the Calgary Herald, Montreal Gazette and Vancouver Province. But Sprouter’s team will be looking for ways to tap into Postmedia’s stable of advertisers and sponsors.
“Postmedia has a long history of working with advertisers and we’re looking to leverage that expertise and look at things we can do together to leverage that in terms of reaching small business,” Prevettte says.
Postmedia was just one of various suitors who came calling after Sprouter announced plans to shut down, Prevette says.
“More than a few parties came forward to continue Sprouter and we really went through and we decided that Postmedia really fit with the strategy and vision we had.”
When asked if she was hoping for a buy out to save Sprouter, Prevette told ITBusiness.ca in July that Sprouter “was never built to sell. Sprouter has always been about building a community.” Today, however, Prevette appears focused on the fact Sprouter will be able to live on, even if acquisition wasn’t in the original game plan.
“It’s been a wild ride. Everyone knows startups are rollercoasters and we can certainly attest to that. It’s a really exciting day and even more special given the circumstances we faced earlier on in the summer. To have faced imminent death, to bounce back and be stronger than ever is pretty exhilarating.”
The acquisition of Sprouter appears to fit in with Postmedia’s push to transform itself from a financially troubled newspaper publisher into more of a digital media content provider. Postmedia was created out of the ashes of the newspaper division at CanWest, which emerged from bankruptcy protection in July 2010 and has cut almost 15 per cent of its workforce since then.
Although Postmedia is still Canada’s largest newspaper publisher by circulation, digital sales only account for about eight per cent of Postmedia’s total revenue, with almost 90 per cent of revenue still generated by traditional print advertising.