Media Fortune Fame & Folly

How The Economist missed out

FiscalNote, the Washington DC-based legal data and analytics company, is to float via a SPAC deal with Duddell Street Acquisition Corp which is expected to value the company at $1.3bn – 7x revenue forecast for 2022. The company was founded in 2013 and has been backed by tech investor Mark Cuban, Yahoo co-founder Jerry Yang, and former AOL boss Steve Case. Existing FiscalNote shareholders (including S&P Global) will retain approximately 76% ownership of the company when listed.

FiscalNote – whose 3,000 strong client list includes major US and international corporates, including Tesla, Nestle, AstraZeneca, 3M, and Netflix, and many parts of the US government. It offers information and analysis on all US legislative proposals and also covers EU regulation. The company uses AI to assimilate large quantities of data with output which assesses risk, uncertainty and commercial opportunity in a market for regulatory information which has been estimated at $37bn.

FiscalNote is forecasting revenue of $173m next year, 90% from subscriptions, and has a staff of 650. The IPO is expected to raise $275m in funding and will close early in 2022.

The valuation may prompt wry smiles at The Economist Group which had sold its longterm US-based legislative media Congressional Quarterly and Roll Call to FiscalNote for a total of £142m in 2018. Consideration for the business – described by FiscalNote as “historic, non-partisan journalistic institutions” – comprised: cash (£64m), loan notes (£46m), and a 18% shareholding (£33m). The Economist became the largest single shareholder in FiscaNote – until last year.

In December 2020, it sold the loan notes and equity for a total of £70m. The divestment (to reduce The Economist Group’s debt levels at the height of the pandemic) priced the 18% FiscalNote shareholding at a mere £17m – 10% of its likely value in the IPO. Ouch.