How Axios Turned Its Editorial Formula Into a Software Business

In 2016, Jim VandeHei, Mike Allen, and Roy Schwartz left Politico, where VandeHei had been a co-founder, Allen had written the Playbook newsletter, and Schwartz had served as chief revenue officer. They launched Axios in January 2017. Axios articles were designed to be brief, usually running under 300 words, with information organized under recurring labels such as “Why it matters” and “The big picture.” The company trademarked the approach as Smart Brevity.

By August 2022, Axios had produced two separate outcomes. Cox Enterprises acquired the news business in a deal that valued Axios at $525 million. The software arm, Axios HQ, spun off into a standalone company led by Schwartz. The newsroom went to Cox, while the founders retained majority ownership of the independent software company.

Axios treated house style as intellectual property. Articles and newsletters followed the same template of a bolded headline, a one-sentence summary, axioms in bold, and bullet points underneath. In 2020, newsletter sponsorships contributed more than half of Axios's total revenue, according to The Wall Street Journal. By July 2022, the company said its Axios Local newsletters had surpassed 1 million subscribers across 24 markets. A rigid format is repeatable and teachable, designed to scale through templates and small editorial teams. New reporters could be trained into it. New city editions could launch on it. And other companies could buy it.

The software business began with inbound demand. According to Axios HQ, half a dozen corporations separately called the founders in 2016 asking for help communicating with the clarity and efficiency of the company's newsletter writers. The calls grew to 20 or more. Schwartz has also said people inside Axios were pressing for the tool to streamline communication between employees.

Axios HQ launched in February 2021 as software that let organizations write internal updates in the Smart Brevity structure. The tool scored drafts on clarity and length, supplied templates modeled on Axios newsletters, and tracked whether recipients read the updates. Licensing started at $10,000 for an annual contract. Eight months after launch, HQ had earned over $1 million in licensing revenue and an additional $2 million from professional services that trained clients in the method. The client list of 150 organizations included Delta Air Lines, local governments, and the Austin Independent School District. Schwartz framed the ambition as whether Axios could be a Bloomberg, with a communication business and a news business side by side.

The revenue was small next to a news business expecting about $100 million in 2022. The retention data mattered more. According to Axios HQ, every licensee that signed in the first quarter of 2021 renewed for 2022 and extended their one-year deals into two-year contracts. A tool embedded in a company's weekly executive update becomes difficult to remove. In September 2022, the three co-founders published Smart Brevity, The Power of Saying More with Less, which became a Wall Street Journal and USA Today national bestseller and fed prospects into the software.

Cox, which had first invested in fall 2021, took 70% ownership in 2022, with founders and employees retaining about 30%. The New York Times reported the price represented about five times projected revenue. Axios HQ was carved out as a standalone company, majority-owned by the founders, with Cox as a minority investor. Nearly 100 of the company's 500 employees worked for HQ at the time.

In March 2023, Axios HQ closed a $20 million Series A at nearly a $100 million post-money valuation, led by Glade Brook Capital Partners and joined by Greycroft. The company reported nearly $7 million in annual recurring revenue and over 500 enterprise clients, including Sweetgreen and Edelman. Within the following year, it reported passing $10 million in annual recurring revenue. Axios HQ says its AI-assisted updates run 40% shorter than traditional workplace communications and that more than 600 organizations use the platform. Its first acquisition, the communications leadership community Mixing Board, closed in late November 2024.

Where Axios Stands Now

One writing formula now supports three separate revenue engines. It underpins the Axios news business owned by Cox, the enterprise software company still controlled by the founders, and a broader ecosystem of books, training courses, and services that bring customers into the software. A decade after Axios began testing the approach, Smart Brevity now extends far beyond the newsroom. It shapes the journalism, guides internal communications at Delta, Walmart, and more than 600 other organizations, and appears in bestselling books and corporate training programs. VandeHei, Allen, and Schwartz used Axios to prove that the method worked. The newsroom later created a larger commercial opportunity. That system continues to spread through the daily communications of the organizations that use it.

Axios built a news company around a distinctive writing system and discovered that the system could support a business of its own. Corporate interest appeared in 2016, before Axios had published its first story. The founders turned that demand into software in 2021, priced the product at $10,000 a year, and saw every early customer renew and expand. When Cox acquired the news business for $525 million in 2022, Axios HQ remained with the founders. The company raised $20 million the following year and now serves more than 600 organizations.

The lesson extends beyond Axios. A media brand can create commercial value through the way it gathers, structures, and presents information. A recognizable format can become software, training, services, or a licensing business with customers far beyond the original audience. What began as a newsroom style guide became a standalone business. See you next week.

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