Why we invested in Canela Media, a digital media company dedicated to the Hispanic market
Demand for Spanish-language programming in the United States is growing as the Hispanic population of more than 62 million people gravitates toward streaming services that offer content in their native language.
Canela Media has emerged as one of the leading content providers for the Hispanic market. The company launched the first free Spanish-language streaming service in the United States, and is harnessing a consumer shift toward ad-supported video on demand services (AVOD).
We invested in Canela Media because the company has developed a platform that makes streaming content accessible to users across the demographic spectrum. In particular, Canela.TV is bringing culturally relevant AVOD programming to Hispanic consumers, irrespective of their financial situation. Customers without access to a credit card – typically required to pay for conventional cable television or video on demand services – can tune-in to Canela TV for free.
Canela Media is growing rapidly in the United States and Mexico, and we think it has the potential to scale throughout Latin America. That growth potential is one of the reasons we joined Acrew Capital and Angeles Investors in a $22 million Series A funding round.
The founder of Canela Media is Isabel Rafferty Zavala, its CEO. She has deep connections with brand advertisers, and has assembled a team of media professionals with knowledge and skill to help the company grow rapidly. Isabel previously founded Mobvious Media, which was focused on mobile advertising solutions targeting Hispanic and African American markets in the U.S. Under her leadership, Mobvious became the second largest Hispanic-focused ad network, according to Comscore, and part of the company was acquired by PRISA Group in 2017.
We think demand for culturally relevant programming in Spanish and English will continue to grow, and Canela Media will benefit from that growth. Canela will likely face intense competition from well-capitalized incumbents, like PrendeTV, and from new start-ups. But the company’s rapidly growing user base should help increase advertising revenue, which will help facilitate investments in the kind of content needed to attract new customers.
The market potential in the U.S. and beyond is significant. The Hispanic market in the U.S. now accounts for about 20% of the total population. Moreover, Spanish is the second most widely spoken native language in the world, with 600 million Spanish speakers.
As advertising dollars and viewers embrace streaming services, we think Canela Media will benefit. This structural shift in the market is a strong tailwind for Canela Media, and includes the Roku Channel, Pluto, Peacock, Hulu, Tubi, and other advertising-driven, cord-cutting alternatives. Canela Media also continues to expand into adjacent categories, such as Canela Music and Canela Kids. Looking ahead, the company is well-positioned to unlock its potential in the rapidly growing Hispanic marketplace.
Carlos Castellanos is an Investor at Samsung Next. Samsung Next's investment strategy is limited to its own views and does not reflect the vision or strategy of any other Samsung business unit, including, but not limited, to Samsung Electronics.