Ozy Media, a Black-founded digital media startup, is shutting down after receiving $5.7 million in PPP loans but no one knows where the money went

OZY Media is a Silicon Valley-based premium media and entertainment startup founded in 2013 by former MSNBC news anchor, journalist, and businessman Carlos Watson. Ozy provides a digital magazine and daily newsletter. Ozy produces podcasts, television series, and events.

At its peak, the startup Ozy received an Emmy for a 2019 television show that aired on the Oprah Winfrey Network and an Imagen Award for Best Informational Program. A black-founded startup, Ozy is largely staffed by members of minority groups, who make up over half of all employees, with its leadership team mostly female.

Three months after launch, Ozy raised a $5.3 million seed round of funding in December 2013 backed by Laurene Powell Jobs, who inherited billions of dollars of stock in Apple and Disney from her late husband, Apple cofounder Steve Jobs. Ozy’s early investors also included Louise Rogers and Ron Conway.

In recent months, Ozy Media has come under intense scrutiny for its business practices. Watson and his company, Ozy, have been accused of misleading the public, advertisers, and investors about the company and its performance. Now eight years after launch and once a darling of investors announced last Friday it was shutting down. The announcement came after a sudden flight of investors and advertisers.

After the spectacular meltdown of Ozy Media, Carlos Watson resigned as a corporate director of NPR last Friday. Watson, who was appointed to NPR’s board in 2016, had just been re-elected to a second three-year term, which had been set to begin next month, according to a report from NPR News.

But that’s not all for Ozy Media. A new report says the startup received $5.7 million in relief loans to help pay employees, but ex-staffers are now saying they didn’t see any of it. According to CNBC, citing data from the Small Business Administration’s website, Ozy Media applied for two loans through a program called the Paycheck Protection Program, or PPP.

According to the data, Ozy’s first loan, for $3.75 million, was approved in April 2020, a month after the U.S. government passed a $2 trillion coronavirus relief bill. The startup was also approved for another $2 million in February 2021. However, several former employees of Ozy Media say there is no evidence that the millions of dollars the company received through a federal Covid relief program to protect paychecks ever went to save jobs or boost pay.

At this point, it is unclear how Ozy used the PPP funds. When contacted by CNBC, Watson did not return multiple emails with specific questions about how the company used the money or who decided how the money would be used.

Since its inception, OZY Media has raised a total of $70.3M in funding over 5 rounds. Its latest funding was raised in November 2019 from a Series C round.