EXCLUSIVE: DriveTribe, the motoring social network founded by The Grand Tour team, is planning to turn its first profit in 2020 after growing the business and taking £2.5M ($3M) of investment from Elisabeth Murdoch.
DriveTribe was launched by Jeremy Clarkson, Richard Hammond, James May and Andy Wilman in November 2016 as an online community for car fanatics, with investment from 21st Century Fox and early Facebook backer Jim Breyer.
But the idea spluttered in its early days. CEO Ernesto Schmitt stepped down just six months after launch, while the company lost £8.3M in its first calendar year of 2017.
More than two years on, Schmitt’s successor as chief executive Jonathan Morris told Deadline that DriveTribe is on course to turn a profit in late 2020 after posting the first revenue in its history.
According to earnings published with the UK’s Companies House, DriveTribe’s sales were just over $1M in the 12 months to the end of December 2018, compared with nothing the year before. The company also cut its losses to £5.3M.
Morris said DriveTribe expects to double its $1M in revenue this year, while this figure could quadruple by the end of 2020, depending on the impact of Brexit and the China trade war.
DriveTribe has started selling for the first time, partnering with clients like Audi to build bespoke campaigns that are rolled out to the social network’s 8.8M monthly unique users. It has also seen growth on other platforms, such as YouTube, where it clocked up 10M video views in July.
The company has expanded into the U.S., Australia, Germany and France, and last month launched sister network FoodTribe, with other spin-offs planned. Growth in the U.S. has been particularly encouraging, Morris said, with 27% of its audience now based in North America.
Behind the scenes, Morris has scaled back the business from 50 to 35 staff and refocused resources, pulling money out of technology and putting it into sales and editorial/video production.
“I took over as CEO two-and-a-half years ago and as with any startup it was chaotic — some things worked well, some did not. We have now proved we can make money, not just have millions users, and we have right-sized the business a bit,” Morris explained.
DriveTribe secured Elisabeth Murdoch’s investment in May, and Morris said she “really liked the platform.” She put in £2.5M via a convertible debt instrument, meaning it can be converted into equity, with an option to make another £2.5M available. Early investors have converted their debt into equity, Morris said, but Clarkson, Hammond, May and Wilman retain control of the company.
“We originally planned on taking a lot more investment, but things went rather well,” Morris said.