June 24, 2021

The growth just keeps going for MarketBeat, South Dakota’s largest digital media company, which saw another surge in business this year and already has plans to move out of its year-old office.

The company, which specializes in delivering stock market research and related content, saw a spike in traffic during the pandemic as tumultuous markets and emerging pharmaceutical investment opportunities drew record numbers.

Then came GameStop, which saw its stock price soar after a “Reddit revolution” and related social media activity showed the growing force of individual retail investors.

“Traffic almost doubled overnight” when that happened, MarketBeat founder Matt Paulson said. “We went from about 600,000 page views a day to 1.1 million a day.”

That matters because every click brings a potential customer.

The more website visitors, the more potential people there are to view ads MarketBeat sells on its site, the more potential email newsletter subscribers and the more potential paying subscribers, who spend $20 to $40 per month for a premium newsletter and access to a suite of web-based research tools.

“The goal is to build the biggest financial email list out there,” Paulson said.

That list has grown to 2.35 million people, including 14,500 paying subscribers.

It’s also trending younger, thanks largely to the effect of platforms such as Robinhood and other retail brokerages tailored to individual investors.

“When I started MarketBeat, there were about 40 million people considered self-directed investors,” Paulson said. “Now, there are 60 million, and we’ve seen our demographics change over the last year quite a bit. It’s skewing a lot younger.”

Forty-five percent of his audience is 35 or younger.

“And we have a lot of people in their 50s and 60s who are into stocks, and it’s their hobby, and they’re trying to catch up and understand how the market dynamic has changed,” Paulson said.

MarketBeat’s products are evolving to reflect that.

“We’re developing more tools based off sentiment,” Paulson said. “Stocks are driven less by fundamentals than they used to be and more by sentiment, more by hype, more by social media hype.”

To that point, his team is developing a new tool “that will index Reddit like a search engine and find out what stocks they’re talking about before they blow up,” he said.

Speaking of blowing up, his company seemingly is too. He’s forecasting $25 million in revenue this year, up from $14 million last year and $7.8 million the year before. His team has grown to 11 full-time employees and 15 independent contractors, largely in Sioux Falls but spread out nationwide.

Paulson started in 2006 as a freelance writer specializing in personal finance content, starting the finance blog American Consumer News the following year and making it a website in 2009. In 2011, he launched a site called Analyst Rating Network, which was rebranded as MarketBeat in 2015.

Growth first began accelerating in 2013 and hasn’t stopped, leading the company to five years on the Inc. 5000 fastest-growing companies list and subsequent inclusion in its hall of fame.

“We’re better at putting ads in the right places than we used to be,” Paulson said. “Our audience size has grown, there is upward pressure on advertising and … there are advertisers we won’t run anymore because they don’t get a high click-through rate. And we’ve done a better job at signing people up for multiple emails.”

After years of using Queen City Bakery as a de facto home base, the company moved into a downtown office across the parking lot from it a year ago. That’s starting to fill up already.

“We’ve hired three people this year, and I would say it wasn’t a problem,” Paulson said. “I think it’s because we’re the preferred employer to some people. There’s a culture element, there’s a cool office element, and there’s a strong pay and benefits element to it.”

The culture is one of “high trust,” he added. “We hire good people, pay them well and trust them to do their work. And it’s also a culture that recognizes MarketBeat is part of their life but not their entire life.”

Employees are required to come in for meetings but otherwise can work from the office or elsewhere.

When everyone is there, “it’s a tight fit,” he said. So he’s planning for the future when it comes to space. MarketBeat recently became the latest tenant to commit to the expanded Cherapa Place, where it will lease 5,000 square feet and join The Bancorp Inc. and ISG in the new office building scheduled to open in 2023.

“We want to build an office that will set us up for the next 10 years and stay in the East Bank,” Paulson said. “It will be a modern, industrial space. It’s not going to look like any other office in that building – exposed ceiling, polished concrete floors, handmade wooden furniture.”

He also likes sharing a building with other corporate and financial tenants, he said.

“I feel like it’s a good branding element. Our name will be on the side of the building, and it will be a good long-term home for us.”

MarketBeat is a natural fit for the building, said Anne Haber, a partner in developer Pendar Properties.

“We’ve enjoyed getting to learn more about the success of this local startup and are excited to add Matt and his team to the mix of tenants in The Bancorp building,” she said. “They definitely will complement the other professional, tech-driven companies that have committed to the project.”

MarketBeat, like the other office tenants, plans to move into Cherapa Place two years from now. In the meantime, there’s plenty to keep Paulson and his team busy. They’re looking into using artificial intelligence to scan SEC filings and create a uniquely intelligent search engine and resulting content.

“I think the vision five years from now is a company of about 30 to 50 people that will be about $50 million in revenue, and we’ll look at acquisition,” Paulson said. “You could see a MarketBeat that has 10 brands and not two or three. I think that’s the future.”