Billy Penn’s model is expanding to another city by merging with a fledgling site that’s already operating in Denver, Colo., and its newly expanded ownership team has plans to seek funding to continue its mission of finding a sustainable model for local news.

Today Washington Post and Digital First Media veteran Jim Brady’s Spirited Media announced a merger with Avoriaz, a company formed by Kevin Ryan, founder of Business Insider, MongoDB, Gilt, Zola, and other successful startups; Gordon Crovitz, former publisher of The Wall Street Journal and early investor in Business Insider; and Jim Friedlich, the current director of the Lenfest Institute for Journalism in Philadelphia (the nonprofit that oversees The Philadelphia Inquirer, the Daily News and Spirited Media will take over the operations, staff and assets of Denverite, a nine-person team that launched in June of 2016 to cover the Mile High City. The addition means Spirited Media now employs 27 people across three cities in regions with a population greater than 10 million: Philadelphia, Pittsburgh and Denver.

“Spirited Media and Avoriaz share a vision: We are local companies with national aspirations,” Brady said. “We each respected what the other was doing, so we decided putting the companies together to form the presumptive leader in the space made a ton of sense. So we’ll now charge forward together on building a sustainable model for local news, based on a diversified revenue model of events, advertising and membership.”

While most of 2017 will be dedicated to integrating Denverite‘s staff and technology into the Spirited Media platform, the merger positions the newly combined company for bigger things, said Crovitz.

“There have been several digital publishing ventures that have become businesses worth in the hundreds of millions of dollars and more, such as BuzzFeed, Huffington Post, Business Insider and Bleacher Report,” Crovitz said. “The missing part of the media landscape in terms of successful digital businesses has been local—and we aim to change that.”

Friedlich, the Lenfest Institute CEO, will not be involved with Spirited Media. “I am focusing all of my efforts on the Institute’s journalism mission and am no longer an active angel investor,” he said.

The merger comes nearly six months after the successful launch in Pittsburgh of The Incline, Spirited Media’s second site, with a staff of six in Pennsylvania’s second-largest city. That launch was made possible by a seven-figure investment from Gannett, the nation’s largest newspaper publisher.

“Gannett is a champion of local news, and these two vibrant companies are a testament to its continued importance, and to the power of connecting with local communities,” Joanne Lipman, Spirited Media board member and Gannett’s chief content officer, said of the merger.

Billy Penn, Spirited Media’s first city site mixing original content with curation and a social distribution strategy, launched in October 2014 with a full-time staff of four. The current team of editorial and sales now stands at nine, with Spirited Media’s product and design team employing three more.

“All of us are driven by the opportunity to create a large and valuable business,” Crovitz said. “But we also recognize that local journalism has been the most decimated part of the journalism industry as legacy business models such as print advertising have come under enormous pressure. Our mission is to find new business models to support local journalism by providing news and information in the new ways readers expect.”

Chris Krewson is the executive director of LION Publishers, a national nonprofit association that serves local journalism entrepreneurs build sustainable news organizations, and the founding editor of...