Digital news start up The Messenger is seeking to raise around $20 million amid layoffs and financial struggles, sources tell Axios.

Why it matters: The funding, if completed, would provide a key lifeline for the media company that launched last year after raising $50 million.

Of note: Company executives told Axios when it launched last May that it didn't plan to raise any additional capital, and instead was hoping to fuel growth via profits.

Zoom in: A slowdown in the ad market has set the media startup back from its ambitious top-line revenue goals, and the company is not yet profitable, a source told Axios.

• Executives initially said they hoped to bring in $100 million in revenue in 2024, which would be an enormous feat considering most media startups take years to grow to that scale.

Driving the news: The Messenger's founder Jimmy Finkelstein, who formerly owned The Hill before selling it to Nexstar, has been pitching new and current investors on a second round of investment for months, sources told Axios, adding that the figure is around $20 million.

• The Messenger's current investors include The Stagwell Group, a D.C.-based ad holding company led by Mark Penn, Victor Ganzi, the former CEO of Hearst, Loews CEO James Tisch, Apollo co-founder Josh Harris, and Interactive Brokers founder and chair Thomas Peterffy.
• In acquiring Grid News last March, The Messenger also took on Grid's funder, Abu Dhabi-based investment firm International Media Investments, as a minority investor.
• Those pitched on the investment say Finkelstein has touted the firm's ability to grow its digital audience quickly since launch. He has also pitched the promise of the company's new video effort, "The Messenger TV," which the firm plans to debut this year.

The big picture: Investors will have to weigh their faith in Finkelstein to quickly turn page views in dollars.

• The Messenger's ad model relies heavily on selling programmatic, or automated, advertising against scaled traffic, as well as events.
• That has proven to be difficult to sustain in an era where social media has become a less reliable source of traffic for news sites.

What they're saying: "In November, Comscore reported that The Messenger generated 88 million page views in only seven months, which puts us ahead of many of our competitors," a spokesperson for The Messenger said. "We anticipate that our traffic will continue to increase substantially at a time when most publications are seeing a sharp decrease."

• The spokesperson declined to comment on fund raising.

State of play: The Messenger on Wednesday laid off roughly 20 employees across business and editorial, with Finkelstein telling employees in a staff note obtained by Axios: "The economic headwinds have left many media companies with significant challenges."

• "The Messenger, as a start-up, has not been immune to those challenges, and we are now taking essential steps to become a slightly leaner company," he wrote.
• The company initially set out to hire 500 people across its business and editorial operations, but the slowed ad market has made it hard to sustain that type of investment and hiring stalled at roughly 300 people.
• "The cuts are complete, and we are not planning any further layoffs," The Messenger spokesperson told Axios.

What to watch: On Wednesday, Semafor reported that The Messenger's board weighed shuttering the publication, after learning that the company is on track to run out of cash at the end of January.

• The Daily Beast reported that the site only had enough money to keep the place going for "weeks, not months."
• A spokesperson told Semafor and The Daily Beast that the company has "already secured investment as part of our second raise, and so the notion of us discussing closure is beyond absurd."
• The Daily Beast had previously reported that the firm's President Richard Beckman told employees last year that the site was "out of money."
• Beckman on Tuesday announced that he would be stepping down on Jan. 31, citing health reasons, but would remain an investor in the company.