The Athletic, a subscription-based digital sports media company, raised $40 million in a series C funding round. With this investment, the company has raised a total of $70 million since its launch in 2016, and is valued at roughly $200 million, according to sources familiar with the deal.

Why it matters: The company, which makes money from consumer subscriptions, thinks it can meet high growth expectations from venture capitalists, many of whom are facing poor returns on investments in ad-based digital media companies.

Between the lines: The founders pitch The Athletic as both a direct-to-consumer brand and a digital media company, which has helped them lure investors amid a bleak outlook for some venture-backed digital media companies that focus on selling ads.

“Our revenue comes in recurring payments. It’s a lot less explosive than ad companies — it’s harder to build — but the payoff is huge in revenue foundation.”— The Athletic co-founder Alex Mather

Details: The round is being co-led by Founders Fund, a San Francisco-based venture capital firm that specializes in technology, and Bedrock Capital, a venture capital firm that specializes in early stage investments. Sources say Founders Fund has contributed a larger investment.

Other participants in the round include former backers like

By the numbers: The company has 300 full-time employees, over 100,000 subscribers and a 90% renewal rate. Its subscription base is roughly the same size as The Los Angeles Times’ digital subscription base, but is 30 times smaller than The New York Times’.

The bigger picture: Digital upstarts are battling to upend decades of dominant sports coverage from ESPN, local papers and radio.

The bottom line: Many of these outlets a long way to go in catching up to legacy outlets with massive audiences and major live broadcasting contracts.

by Sara Fischer

Source: Axios