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Ozy Media - The Ship Has Sunk so Deep
A Startup Founder Impersonated a Youtube Executive to Get Funding... $40 Million of it
While we were all stuck at home last winter, Goldman Sachs was busy doing the due diligence for a $40 million investment in a thriving media company. That company is Ozy Media. The final step was a video call between Goldman Sachs, the CEO of Ozy Media, and a Youtube executive….this is where everything fell apart.
Let’s go back to the year 2013. Carlos Watson, a former news anchor who had previously worked at Goldman Sachs decided to launch Ozy with another Goldman Sachs alum, Samir Rao.
Watson was born to a financially struggling family. He worked his way up to Harvard and graduated with honors and even attended Stanford Law School. His fortunes were finally turned!
After working in consulting, banking, and TV, he decided to start his own media company for the new generation.
The company was off to a great start. It raised a $5.3 million seed round from seed investors including Chegg CEO Dan Rosensweig and Laurene Powell Jobs.
A Behemoth That Never Existed
The company went on to raise over $ 70 million over 4 funding rounds.
Watson said the company newsletter had 25 million subscribers!
The company said it had 50 million monthly unique users.
All those big numbers might be just smoke and mirrors.
According to the New York Times, The traffic to the website is estimated to have peaked at nearly 2.5 million people in 2018 down to 479,000 last July.
Axios quoted an expert saying that more than 95% of viewership for “The Carlos Watson Show” was paid.
Newsletter subscribers’ requests to unsubscribed were ignored.
February 2nd. Ozy scheduled a call between Goldman Sachs and Alex Piper, the head of unscripted programming for YouTube Originals. Piper apologized for running late and asked for the meeting to be conducted through a conference call instead of Zoom. All the participants joined the conference call and Alex went on to speak about Ozy’s success on Youtube— Check out the channel, most videos didn’t even cross 1000 views😂.
Everything was going great, except the speaker’s voice was a bit weird. It seemed like it was digitally altered. This alarmed the Goldman Sachs team which decided to reach out to Alex Piper directly. Sure enough, Piper had no idea what the Goldman Sachs people were talking about.
Of course, Youtube didn’t like the situation and after investigating it, they realized that the fake Alex Piper was Samir Rao, the cofounder of Ozy.
Goldman Sachs didn’t take the matter public — probably to save face — but decided not to invest in the company.
After the New York Times article about the matter and the public outlash. The company announced that it was shutting down.
Many compared Ozy Media CEO Carlo Watson to Elizabeth Holmes after the incident.
That didn’t sit well with Watson and he decided to reverse the shutdown decision.
When you saw people start to put my name with Elizabeth Holmes, who never had a real product, who raised billions of dollars— Carlo Watson, Ozy Media CEO
Ozy Media will remain open for now but probably it’ll be dead in the water for a while.
Honestly, the funniest thing about this entire story is that Goldman Sachs had to speak with a Youtube Executive to find out if Ozy was successful. THE COMPANY YOUTUBE CHANNEL HAS LESS THAN 4000 SUBSCRIBERS!!!