Twitter has acquired Niche, an ad network that helps social-media stars make money, for about $50 million in cash and stock, including employee-retention incentives, multiple sources familiar with the deal told Business Insider.
One source pegged the number between $45 and $60 million.
Niche had term sheets and was about to raise a new round of financing at a valuation that was about $50 million when Twitter swooped in.
Rob Fishman and Darren Lachtman cofounded Niche in late 2013. Fishman previously managed social media for The Huffington Post, then sold a company, Kingfish Labs, to BuzzFeed in a stock deal.
He and Lachtman noticed individual followings on sites like Instagram and Vine were growing rapidly, and brands were interested in advertising on the platforms. They launched Niche to become a new type of ad agency, connecting brands with influential people online. Vine and Instagram celebrities work with Niche's advertising partners to promote their products in a natural way to their followers.
"I'm literally making a living off this," one Vine star, Cody Johns, told Business Insider in March. One campaign he ran with Niche netted him roughly $20,000.
Rob Fishman, cofounder of Niche.
As of March, Niche was working with 50 advertising clients and ran campaigns for American Eagle and Universal Studios. After its first six months, the company generated $750,000 in gross revenue. Brands were paying Fishman's team anywhere between $15,000 and $150,000 a month to devise and execute effective Vine, Tumblr, and Instagram campaigns for them.
A Niche investor says the company was expected to generate more than 1 million in net revenue this year.
