THG founder Matt Moulding has lifted the lid on why they bought London business newspaper CityAM.

The online retailer raised a few eyebrows when they bought the loss-making CityAM in a pre-pack deal.

In his latest LinkedIn blog, Moulding revealed how THG paid CityAM’s £100,000 payroll for July, knowing the company was going into administration before the deal with THG was completed.

“It’s whacky, but there might not have been a business left to try and buy, so we did it,” admitted Moulding.

The entrepreneur also revealed that THG Ingenuity had launched a CityAM app just six weeks after the acquisition.

Moulding said CityAM was launched in 2005 as a business newspaper for commuters and despite hitting turnover of £5m, faced an ‘endless fight for survival’ and fresh investment.

“This is the real life of entrepreneurism at the coal face,” said Moulding. “Nobody waltzes into an industry and quickly beats the existing players. Sure, Google and Meta did it, but these journeys are as rare as good news stories in the Sunday Times.

“The CityAM journey says everything you won’t find written in the daily business pages. Over 18 years the team have given everything, literally.

Why did THG buy CityAM?

“Eight weeks ago I saw a headline saying an investor had pulled out and CityAM was for sale. Rapidly rising interest rates sent investors fleeing from the UK, with CityAM now left in the lurch.

“It was immediately clear they’d run out of cash despite founder Lawson [Muncaster] and the team raising cash to keep going by putting their homes at risk. July wages for the circa 50 staff couldn’t be paid.”

Moulding said the CityAM team faced ‘financial ruin’ by the ‘lowball bids’ from the big UK media titles.

“We know the pain and bravery involved in running your own business, and this was an unacceptable outcome after 18 years disrupting UK media,” he said.

“The first thing we did was work out how much debt Lawson and the team had personally guaranteed – £1.5m – so this was what we paid.

“We knew it was double what the big UK media papers had offered but it was still a ridiculously cheap deal.

“True entrepreneurism is dealing with the relentless grind, sacrifices and disappointments, but keeping going throughout. The jets and yachts don’t ever come otherwise.

“A phrase I like is: ‘Everybody wants to be the man, until it’s time to be the man’. People see the rewards, but few are prepared to put in what it takes. It’s not for the faint-hearted.”

Moulding has previously promised that the only editorial policy for CityAM would be to act as a ‘cheerleader’ for businesses.

Moulding bids farewell to the ‘stiff upper lip’ and fights back

THG’s acquisition of CityAM attracted some criticism. The Guardian’s Nils Pratley wrote at the time: “The retail billionaire’s newspaper deal looks like an indulgence when his core business needs attention. Moulding should be using his own money, not his shareholders.”