- VentureBeat is a very popular site that covers the venture capital area and the companies that are funded by VCs.
- VentureBeat claims to be independent journalism, but is it?
We ran into VentureBeat when analyzing a separate story. The articles we read at VentureBeat seemed to repeat claims made by the entity they were covering and noticed that a large amount of information published in the article was false.
We will begin by analyzing one of their stories in this article.
VentureBeat Covers Scoutbee
The article begins as follows:
Procuring parts and settling on suppliers are two of the most challenging undertakings in supply chain management, it’s safe to say. Companies aren’t always transparent about their networks and capacities, and short of conducting exhaustive searches and validating each candidate individually, the solutions are few and far between.
That’s why, in 2015, four German entrepreneurs — Christian Heinrich, Fabian Heinrich, Gregor Stühler, and Lee Galbraith — founded Scoutbee, which develops and sells access to a uniquely AI-driven supplier discovery platform. They’ve caught the attention of investors, evidently — Scoutbee today announced that it’s raised $12 million in series A funding contributed by HV Holtzbrinck Ventures, 42Cap, and Toba Capital, bringing its total raised to $15.5 million.
This article begins by making the case for AI in supplier management and then describing the amount raised for Soutbee.
Repeating What the Company Says
The company says the bulk of the fresh funds will be put toward customer acquisition in the U.S. and Europe, as well as further development of its AI-powered apps.
“This investment fuels our focus of growing our customer base and operations on two continents,” said Galbraith, Scoutbee’s managing director. “The reception from procurement executives in the U.S. has matched what we’ve seen in Europe — leaders want to see deeper supplier insights, perform strategic scouting faster and profit from faster time to market and innovation. Here in the U.S. where manufacturers are scrambling to respond to imposed tariffs, we can help purchasing leaders evaluate suppliers with speed and precision to remain competitive.”
There is no comment from the author of this article. Everything up to this point has been provided by Scoutbee. This is undifferentiated from a press release.
Scoutbee’s Central Product
Scoutbee’s suite — which is underpinned by Artemis, the company’s AI engine — can benchmark existing suppliers from their sourcing behavior with the competition, and find new products and suppliers efficiently thanks to a streamlined catalog. Every 10 weeks, Scoutbee analyzes up to a terabyte of supply chain data, sussing out the relationships among more than 14 million companies, their customers, and over 3,400 OEMs globally.
One customer — Audi — discovered 329 potential suppliers compared with the 38 it found through traditional channels, and completed the “scout-to-source” process in just seven weeks while saving 68%. Other satisfied clients include Adelfiolzener, DMG MORI, Knauf, and Bosch Group’s Rexroth.
“The procurement market is hungry for a disruptive and easy-to-implement solution like Scoutbee’s,” said HV Holtzbrinck Venture partner Jan Miczaika. “While there are many procure-to-pay technologies for chief procurement officers and their teams, Scoutbee, with its AI-powered technology, bridges a huge gap in supplier visibility and the process of sourcing strategic projects.”
Scoutbee is headquartered in Würzburg, Germany, but in January opened offices in Arlington, Virginia.
After reading what is nothing more than a press release, and does not really have a VentureBeat author, as the content was provided to VentureBeat by Scoutbee, without VentureBeat performing any analysis or contradiction, we then noticed a peculiar item in the upper right hand corner of the website.
That was independent journalism?
In fact, lets back up even further.
That was journalism?
If the author does not write the article, but the article is written by a company trying to promote itself, that is not considered journalism. That is either called PR or some contract marketing.
Secondly, why does a reader have to contribute to reading press releases from a company — shouldn’t the company be paying the reader?
This contribute button looks like an artifact that makes the reader THINK that VentureBeat is not a rigged affair and distributing PR releases for paying companies. And that this article was not paid for by the subject of the article, in this case, Scoutbee.
The link actually goes to a subscription page. VentureBeat appears to be asking the target (the readers) to contribute in addition to what VentureBeat has already charged Scoutbee.
VentureBeat writes articles that do not a journalistic entity, and they are the exact opposite of an “independent” entity but are dependent. They are a dependent PR website. They run paid placements, however, there is no mention of the funding of the site. This means they do not disclose that they are paid by the entities being promoted.
Its all secret and behind the curtain. However, their funding is obvious from reading their articles, but we are extremely experienced in media analysis.
Independent journalists question what sources of information provide them, they don’t simply allow the sources to write the article for them.
Not all articles are like this at VentureBeat, some that cover policy seem to have an actual writer and do not simply repeat covered entity quotes. But readers, of course, must discern which are which, and there is no indication of which articles are industry-funded and which are not. Even Forbes, which is now owned by a China based company, as we cover in the article Can You Trust IDC and Their Now China Based Owners?, declares which articles provided by contributors (which means outside writers that paid to have the article carried)
And again, you can’t be paid for by industry sources and call yourself independent.
How Media Entities are Forced to Sell Out
However, here is the problem. How else is VentureBeat supposed to make money? It can’t sell its magazine as it would have in pre Internet era. It can’t get much money from advertising, because that has mostly been gobbled up by Google (you know, the company that does no evil). Media entities now have no other choice but to harvest its income from the industry side, and this means that readers no longer have their interests represented. This is the point we have found repeatedly in analyzing a wide variety of IT media entities — each one of them is dependent upon industry for nearly all of their income.
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Financial Bias Disclosure
Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.