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Specialized and Outside (Pinkbike, Beta etc) Share Same Investment Company

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1/19/2022 8:08 AM

via some tweets, came across this website
https://zone5ventures.com/#what_we_do
says - "Zone 5 Ventures is an early-stage investor with Specialized as our sole limited partner..."

https://zone5ventures.com/#portfolio
scroll down the page and Outside is in their portfolio. Outside (formerly Pocket) now owns PB and Beta among other things.

https://zone5ventures.com/#contact_us
on the contact page is this address, which is specialized HQ
MORGAN HILL
15130 Concord Cir
Morgan Hill, CA 95037

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1/19/2022 8:12 AM

Can "subscription" bikes be far behind?

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1/19/2022 8:28 AM

So, what you are saying is that this venture capital company....whose only investor (aka all the money) is Specialized. While on paper it isn't "owned by" but they have the same offices..... aka same building. so basically is specialized.

They own or have at worst case a very large share of Outside media.....

Wow.... can't imagine there isn't any influence there at all....

So guess we will have to keep tabs to see what those reviews are like throughout any of the Outside Media sites are for any specialized product. also...what are they paying for advertising on the sites? or are they?

Def seems a little conflict of interest....

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1/19/2022 8:31 AM

One way to own the market is to own the media. Look at what FOX and OAN did for the GOP. They influenced a generation of voters.

How can we sell more bikes AND make sure our competitors don’t get favorable media time? 🤔 I know! We buy as many media outlets at once!

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"Flow like water.."

1/19/2022 8:56 AM

Black Rock and Vanguard basically own everything. And they own each other.

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1/19/2022 9:18 AM
Edited Date/Time: 1/19/2022 9:24 AM

Does being in their portfolio mean they own more than 50 percent of outside? Sorry if this is a dumb question, when it comes to financial stuff like this I'm pretty ignorant.

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1/19/2022 9:22 AM

Curly wrote:

So, what you are saying is that this venture capital company....whose only investor (aka all the money) is Specialized. While ...more

Good find Spomer.

Curly, you are making some huge generalizations here. Companies commonly invest in other companies, this is just a "creative" way to do that (using the VC LP/GP structure). Plus, VC is all the rage right now. I see advantages to doing it this way.

One other thing we have zero insights to - what their investment into Outside, Zwift, Pom etc look like. You can acquire a very small stake in a company, and depending on the structure you may have a 100% passive stake (non voting shares etc). Looking at the valuations some of these companies are getting (insane), I'd bet this fund isn't acquiring controlling stakes in any of these brands.

Finally, there are lots of instances where brands silo off editorial from investment. You see this in banking (wall between IB and sell side research) and even places like Vital/PB (where editors are walled off from sales people).

Regardless, crazy times to see how far an investor is willing to go to 'find yield'. When Outside is receiving $150M in fundraising from Tier 1 VCs...well....

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1/19/2022 9:46 AM

nskerb wrote:

Black Rock and Vanguard basically own everything. And they own each other.

I went down the rabbit hole of PR's, communications, of all this, I don't see any ties to BR or VanGuard, where did you see that?

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1/19/2022 10:16 AM

i bought a levo so do i get a free life time subscription to pb paywall

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1/19/2022 10:56 AM
Edited Date/Time: 1/19/2022 11:01 AM

nskerb wrote:

Black Rock and Vanguard basically own everything. And they own each other.

Stiksandstones wrote:

I went down the rabbit hole of PR's, communications, of all this, I don't see any ties to BR or VanGuard, where did you see ...more

The only ties you'd find Stik is if somehow a fund has taken money from some massive asset management company (EG, BlackRock) and then THAT fund invests in Specialized and then THAT money moves over to the "Specialized VC fund".

In other words, the poster is just making huge generalizations that I wouldn't waste any time on.

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1/19/2022 12:52 PM
Edited Date/Time: 1/19/2022 12:56 PM

nskerb wrote:

Black Rock and Vanguard basically own everything. And they own each other.

Stiksandstones wrote:

I went down the rabbit hole of PR's, communications, of all this, I don't see any ties to BR or VanGuard, where did you see ...more

jeff.brines wrote:

The only ties you'd find Stik is if somehow a fund has taken money from some massive asset management company (EG, BlackRock) ...more

I assumed so, thanks.


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1/19/2022 1:22 PM
Edited Date/Time: 1/19/2022 1:26 PM

The managing partners at Zone5 are both employees at Spec, appears to simply be Spec's venture arm. https://www.crunchbase.com/organization/zone-5-ventures
The privacy policy link on the Zone 5 website even simply links out to Spec's privacy policy
Also looks like they're 1:4 of the investors in Outside Media, https://www.crunchbase.com/search/principal.investors/field/funding_round.has_funding_round.forward/num_investors/pocket-outdoor-media-series-b--6c147502

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1/19/2022 1:40 PM

I believe this whole thing was covered by CyclingTips on a podcast of theirs last year. If I recall, the members of Zone5 are Specialized employees who have invested in their own company and others including Outside. CT didn't have any inside info about what was going on and did not know about it until someone else pointed it out to them. They have been adding a by-line in all of their Specialized/Rpval reviews now that state they are not influenced by Zone5. From their Diverge review:
"Disclosure: One of the investors in Outside Inc. — the parent company of CyclingTips — is Zone 5 Ventures, which supposedly isn’t technically owned by Specialized, but Specialized is the “sole limited partner” and is at least partially run by current and/or former Specialized employees (it’s complicated, and we have no idea how any of this works). Zone 5 Ventures has no influence on our editorial coverage at CyclingTips, but the optics are ugly, so we thought you should know."

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1/19/2022 2:14 PM
Edited Date/Time: 1/19/2022 2:14 PM

chacou wrote:

The managing partners at Zone5 are both employees at Spec, appears to simply be Spec's venture arm. ...more

Yeah, but they didn't lead any of the rounds. There is no way this arm of Specialized is doing huge deals unless Specialized is an order of magnitude bigger than any bike company I know of (and by that, I mean the size of a large auto maker). I'm not VC guy (dream job to be honest) but am pretty sure funds can use leverage in excess of something like 10-15%. So this means whatever money Specialized has to contribute to the fund (as sole LP) is the entire amount the company can invest.

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1/20/2022 2:00 AM

I've been saying this since Outside acquired Pinkbike. I'm actually the person who originally posted this connection under the Pinkbike review of the Stumpjumper Evo.

So yeah, Specialized effectively now pays the Pinkbike editors wages, which certainly explains a lot of things.

Pinkbike and Beta MTB have been extremely positive and enthusiastic about a lot of Specialized products lately. They've put out raving reviews, even when the product in reality was less than exciting. Obvious conflict of interest and a huge red flag.

It honestly makes Pinkbike's chief-editor Brian Park, who likes to take a hard anti-corporate stance, seem like a huge hypocrit and a d*ckhead.

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1/20/2022 2:13 AM

jeff.brines wrote:

Good find Spomer.

Curly, you are making some huge generalizations here. Companies commonly invest in other companies, this is ...more

-The managers of Zone5 are Specialized employees.

-Their headquarter is in a Specialized building.

-Zone5 owns 25% of Outside.

-PB's sister publication CyclingTips is actually disclaiming the connection. They do however claim that "Zone 5 Ventures has no influence on our editorial coverage at CyclingTips", but that is exactly what they would say, isn't it?

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1/20/2022 7:46 AM

FullSend wrote:

I've been saying this since Outside acquired Pinkbike. I'm actually the person who originally posted this connection under the ...more

I think they have been positive reviews because Spesh make very good bikes.
Just because a bike company is large does not make them bad.

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1/20/2022 8:24 AM
Edited Date/Time: 1/20/2022 8:28 AM

FullSend wrote:

-The managers of Zone5 are Specialized employees.

-Their headquarter is in a Specialized building.

-Zone5 owns 25% of ...more

Where do you see Zone5 owns 25% of Outside? You have Pitchbook access?

Regardless this whole "conflict of interest" thing is hilarious to me. You all do realize we're talking about bike reviews, right? The conflict of interest has been there from the get go, investor or not. Most of the time, to get a product featured/reviewed/etc you have to be an advertiser on the site. EG, you pay the company for an ad package, they'll also review the product. The media company knows if they write a shit review, the company likely won't be super into reupping their ad spend. This is how it works for basically every adventure sport media company in existence. However, there is a siloing off of editorial staff from sales staff to deal with this problem. You'll find the same in a number of other industries fyi ("walling off" groups).

Don't like it? You'll need to find someone like Paul Aston, buying his stuff for full retail, living in the sticks and doing super uber long form reviews on it. Its a difficult model, though "most honest".

Specialized builds good product. They are investing profits back into the space they operate. That's not a crazy way to do business, nor is it as nefarious as you are pretending. I highly doubt there is some action passed down from the board room to always "pump up those Specialized reviews". Again, they make great products. You won't see a bad review from there because its highly unlikely Specialized puts out a bad product anytime soon.

Its not like the CEO of Outside is going onto twitter, pumping shitty Specialized product which he also has a vested interest, then somehow profits like a certain billionaire who owns a car company and pumps crypto (he often has a massive stake in) whenever he needs a nice bonus...




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1/20/2022 12:07 PM

jeff.brines wrote:

Good find Spomer.

Curly, you are making some huge generalizations here. Companies commonly invest in other companies, this is ...more

FullSend wrote:

-The managers of Zone5 are Specialized employees.

-Their headquarter is in a Specialized building.

-Zone5 owns 25% of ...more

jeff.brines wrote:

Where do you see Zone5 owns 25% of Outside? You have Pitchbook access?

Regardless this whole "conflict of interest" thing is ...more

Jeff, you can easily find on the net, 3 rounds of funding from zone5, to outside, for almost $170m dollars.

I am not making any claims, assumptions, etc, nor do I know outsides value, but I did find a page with those 3 rounds that added up to just below 170m, so perhaps thats where "full send" is making the 25% connection? Who knows.

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1/20/2022 12:48 PM

I do agree with his Jeff’s sentiments that there really isn’t a conspiracy to be found when mike kazimer says specialized shoes are good or an enduro is fun to ride.

I do find the whole thing interesting though. Definitely goes to show how big specialized is. I would’ve assumed their fuck you money was in the tens rather than hundreds of millions of dollars.

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1/20/2022 1:19 PM

Stiksandstones wrote:

Jeff, you can easily find on the net, 3 rounds of funding from zone5, to outside, for almost $170m dollars.

I am not making ...more

Stik - Sure, however we can't see the company's actual cap table. We don't know how much each fund purchased in each round nor can we see what the valuation was at each round (unless they tell us, which they aren't here). All we know is they've raised $170M and Zone5 was part of that total raise.

Bulletbass man, as I just implied, we don't know the amount they are throwing around. It might be north of $100M, but I'd guess its in the tens of millions.

I know all this is kinda complicated, and visibility into this world a bit opaque.

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1/20/2022 1:24 PM

maybe the question we should be asking is how can Vital get some of that sweet sweet VC money?

:D

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1/20/2022 1:31 PM

I heard Littermag Capital secretly owns vital.
Dun Dun Dunnnnnnnnn

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1/20/2022 3:52 PM

Stiksandstones wrote:

I heard Littermag Capital secretly owns vital.
Dun Dun Dunnnnnnnnn

littermag capital = whatever the value of the yaris is currently HA

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1/20/2022 4:19 PM

sspomer wrote:

littermag capital = whatever the value of the yaris is currently HA

I have two physical copies of littermag. I should convert them to NFTs and auction them.

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1/20/2022 5:07 PM

bulletbass man wrote:

I do agree with his Jeff’s sentiments that there really isn’t a conspiracy to be found when mike kazimer says specialized ...more

Have a look at the consolidation of bike industry media now under the Outside umbrella - all the way down to the trade journal BRAIN. With PB, cyclingtips and BRAIN, the Outside/Specialized interests control the key news sources for MTB, Road and the industry trade news itself.

Of course the Outside CEO is not going to go hype Specialized blatantly - that would be ridiculous and citing that as the litmus test for acceptability is rather Trumpian. Subtle things can also shift the needle. Im not saying it's happening, but it's not that far fetched. Even little bias' matter when it comes to truth in media and reporting.

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1/20/2022 8:24 PM
Edited Date/Time: 1/20/2022 8:25 PM

bulletbass man wrote:

I do agree with his Jeff’s sentiments that there really isn’t a conspiracy to be found when mike kazimer says specialized ...more

DubC wrote:

Have a look at the consolidation of bike industry media now under the Outside umbrella - all the way down to the trade journal ...more

Isn't Beta MTB and Velonews in that same umbrella? and of course Outside mag-which is of course a healthy stack of good media outlets, that's for sure.

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1/20/2022 11:33 PM

bulletbass man wrote:

I do agree with his Jeff’s sentiments that there really isn’t a conspiracy to be found when mike kazimer says specialized ...more

DubC wrote:

Have a look at the consolidation of bike industry media now under the Outside umbrella - all the way down to the trade journal ...more

Is it nefarious though? Wouldn’t specialized be incentivized to have a stake in outside just to make sure it isn’t crap? Whether we like it or not outside will have an impact on the look of the sport going forward especially among noobies looking at getting into the sport.

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1/21/2022 5:24 AM

Stiksandstones wrote:

Isn't Beta MTB and Velonews in that same umbrella? and of course Outside mag-which is of course a healthy stack of good media ...more

to be fair, this kind of brand consolidation isn't unique to the bike / outdoor industry.

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1/26/2022 5:23 AM

DubC wrote:

Have a look at the consolidation of bike industry media now under the Outside umbrella - all the way down to the trade journal ...more

"Of course the Outside CEO is not going to go hype Specialized blatantly - that would be ridiculous and citing that as the litmus test for acceptability is rather Trumpian"

Answer: Zone5 has a seat on the Outside board. I never said anything about the CEO. But thanks for labeling me "Trumpian".

"Subtle things can also shift the needle. Im not saying it's happening, but it's not that far fetched. Even little bias' matter when it comes to truth in media and reporting."

Answer: You don't seem to be grasping how far companies go to "shift the needle" when it comes to product reviews (all companies). Most companies make sure media types have one *hell* of a time when launching something big (like a bike). Trips to exotic places. Open bars. Access to WC level mechanics/tuning. Hanging out with cool pros. The list goes on. Obviously certain people will be more swayed by this sort of schmoozing than others, but this idea that all this review stuff is happening in some sort of scientific laboratory is TOTAL SHIT. There is so much bias in reviews its insane. (right on down to "what the rider thought was cool when he was a kid"). Plus, most reviews read like AI wrote them. I swear I could look at a bike's geometry, intended use, and travel, pay close attention to the cool buzzwords of the year and write 80% of the reviews without ever having ridden the bike. "but what about durability testing". Yeah, what about it? No magazine is riding a bike for 2 years to really suss that out. Sometimes testers can break stuff, but its hardly a representation of "real world".

These are gear reviews. This is not geopolitical conflict reporting. Not some deep dive into a politician's campaign history. Realize the space you are playing.

Final point, Specialized investing in these companies has a much bigger goal (unless they are stupid). ***build a sustainable profitable company***. That's the only way they see a return that is worth the investment. If they were really looking for control of voice, they'd be much better off just spending more on their media launches.

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