OTTAWA — The Logic announced a fundraising round totalling $4 million in equity and debt Tuesday morning, with the U.K.’s FT Ventures the lead investor.

FT Ventures is a corporate cousin of the Financial Times.

An announcement of the investment said the new money will fund expansions of both editorial and business operations at The Logic, a digital news publication that covers Canadian business and public policy with a focus on the innovation economy. The site’s pitch to readers is that it offers journalism worth paying for.

“We believe in the mission and what the founders are trying to do,” said Alexandra Calinikos, the corporate development and strategy director at FT, in an interview from London. “We share the same values from a journalistic perspective and we think the Canadian market can really benefit from more high-quality journalism.”

Launched in 2018 by CEO and editor-in-chief David Skok, The Logic now has 21 permanent staff, with reporting bureaus in Vancouver, Calgary, Toronto, Ottawa and Montreal. 

“It’s a bet on human-powered journalism at a time when that is under severe threat,” Skok said of the new investment. “I hope people will look at that as a validation of what we do and as an endorsement of the importance of original journalism, not only in this country but around the world.”

He would not say how large a stake FT Ventures is buying, except that it’s becoming a minority shareholder.

Making the deal was not difficult, Skok said: “This was about alignment on strategy. This is a strategic investor who has a long-term view and who believes in human-powered journalism just like we do.”

FT Group is a subsidiary of Japanese media company Nikkei. Launched at the end of February, FT Ventures formalized FT Group’s investments in information-sector startups. Axios reported at the time that its focus would be on taking minority stakes in high-growth companies.

Besides The Logic, FT Ventures lists five portfolio companies, including The Business of Fashion (founded by Canadian Imran Amed), Sifted (which covers European startups and was itself spun out of the Financial Times) and Charter (which reports on the future of work and workplaces).

Like The Logic’s, the Financial Times’s business model is largely based on subscriptions. Its print editions are published on distinctive pink paper; its FT.com website has a strong paywall. 

Building long and deep relationships with readers is different from trying to make viral content, Calinikos said.

“It’s something that we have perfected over many years,” Calinikos said. “FT is one of the first movers in actually providing news which was based on quality and not on clicks.”

The most recent public filings in the United Kingdom, representing the Financial Times’s operations only in that country, show it turned an operating profit of £13.4 million in 2022.

Some of FT Ventures’s investment in The Logic is an in-kind contribution of services from FT Strategies, the media consulting arm formed to sell FT Group’s expertise in building digital businesses and transforming traditional ones.

“At a time when news organizations are grappling with the erosion of social traffic and search traffic—how do you grow in this environment?” Skok said. “The FT and FT Strategies know how to do that, and so we’re very excited to learn from them.”

Skok added that he’d met Financial Times people here and there over his years in journalism. The investment came together over a year of increasingly serious discussions after he visited the Financial Times’s London headquarters in spring 2023.

“This is an organization that so clearly puts journalism at the centre of everything they do, and I like to think that we have always tried to do the same thing,” he said.

Previous investors Relay Ventures and Four Cornerstones Capital also participated in The Logic’s latest round. So did new investor Roynat Capital, a subsidiary of Scotiabank, which is providing debt financing.

The Logic covers both Roynat and Scotiabank, as it has Relay’s investments. Skok said having Roynat as an investor will not affect The Logic’s journalism.

“We keep our newsroom operations independent from our business operations,” he said. “They understand the rules of the road.”

Relay’s new investment this round increases its ownership stake, said Irfhan Rawji, the chair of The Logic’s board and managing partner at Relay. 

“Our thesis was it was only a matter of time before others would see what we see,” he said.

He cited the quality and quantity of The Logic’s reporting, Skok’s reputation and leadership and the importance of journalism to democracy as key elements in the company’s value to investors. The FT Group’s involvement will increase that value, he said.

“There’s just a handful of media organizations that are truly best in class,” Rawji said. “Being associated with one of them [in the Financial Times] is great for The Logic.”

FT Ventures will name a director to The Logic’s board, Rawji and Calinikos both said. Rawji will remain its chair.

The Logic is FT Ventures’s first investment in Canada, but not likely the last. Calinikos said the FT Group sees the country—English-speaking, with a strong financial sector—as an appealing place to invest.

“Part of our conversations and involvement with The Logic is probably going to be based on working together and looking at other opportunities in the market,” she said.

Editor’s note: The Logic’s newsroom produced this story independently, without the involvement of David Skok or other executives or investors. You can read more about how we manage conflicts of interest here.