Which social media sites you get your news from is an incredibly hot topic. By now, we are all aware of the unintended consequences of letting ‘engagement-prioritizing’ algorithms decide what news article should be pushed in front of people. Using social proof as an alternative validation layer for content resulted in eroding trust in media companies — with a recent Reuters Institute report noting only 29% of U.S people surveyed trusting the news, compared to 45% in Canada and 54% in Brazil. The ‘echo chamber’ and ‘media bubbles’ phenomena, which came to the front of discussions following the 2016 US election and Brexit, have now attracted the attention of law-makers.
Many governments are attempting to legislate on the distribution of news online and break the dominant positions held by US tech giants Meta (previously Facebook), Twitter, and Google. Earlier this year, Australia passed a law ordering Google and Facebook to pay publishers for news driving engagement, which resulted in Facebook pulling out of the lucrative Australian news market altogether, while Google rushed to sign distribution agreements with publishers. Several European countries and Canada announced they were considering similar measures.
This rapid shift in the news landscape creates opportunities for news aggregators with a different distribution model to capture shares of a lucrative market (Google and Facebook have spent more than $1B in publisher deals to acquire news content last year, an amount widely criticized by media companies as insufficient). And investors are taking note. Since 2020, Reddit raised a $250M Series E, Twitter’s CEO resigned a few months after a public fight with investors, and TikTok, now valued higher than Twitter, was rumored to attempt to go public in late 2021, early 2022.
However, not all are convinced social media companies have the power to fix the problems they created. This is why we are excited about one of our portfolio companies, Ground News, who is creating a validation layer which attempts to offset political bias but also bias towards truth. Harleen Kaur and Sukh Singh have demonstrated a lot of grit – pushing through difficult times for years in order to discover this approach to solve this issue. They are already processing more than 30,000 news stories per day and have secured several key partnerships with news organizations. We are glad we can support them at Velocity as they tackle this urgent issue.
Why Ground News chose Velocity
“I was living and working in Berlin, Germany in another startup when my co-founder and I decided to work on Ground News. I tried convincing him to come to Berlin because it’s a very young ecosystem with lots of talent,” recalled Harleen. “But Sukh was a graduate from the University of Waterloo and convinced me to come to Kitchener-Waterloo and to Velocity, instead. Our choice wasn’t just another incubator in Toronto or Waterloo. It was Europe or Canada. It was so clear that Velocity was the right place for us that I moved continents.”
“First: The Canadian ecosystem is thriving. Being connected to the University of Waterloo gives us fantastic access to talent. And Velocity is a brand name, which is a huge advantage when you’re looking at an incubator to be associated with. It was a no brainer for us from that perspective. Additionally, we are building a news app. Being in Canada, we can be close to the US, the epicenter of the ‘fake news’ issue, while remaining neutral.”
“Second: the facilities are amazing. I worked in a few places, including corporate jobs. Velocity is the best workplace I’ve ever had. It’s amazing to have all those facilities available for free to a first-time founder or early founder.”
“Third: the community, and by community I mean both the Velocity mentors and the other founders. I love the energy; to see that everybody else is working on something and you’re not alone! When you hit a problem, there is an ecosystem of people you can lean on.”
“Last, of course, the mentors and the advisors. At Velocity, you don’t have to follow a program or do homework. You have world class mentors and advisors who ask you “what are you struggling with? How can we help you?”. It’s very personalized. That is phenomenal.”
“Having access to these facilities and resources for free and with very little conditions attached, I don’t think there’s any other incubator or any other workspace that offers that to you with so much generosity.”