Related Party Transactions

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

We have certain revenue share agreements with related parties. Accordingly, we recognized revenue from related parties of $178 and $373 for the three months ended March 31, 2022 and 2021, respectively.

We also incurred revenue share expenses paid to related parties of $923 and $5,997 which were capitalized as contract origination costs for the three months ended March 31, 2022 and 2021, respectively.

Additionally, a related party provided call center support and other services to the Company for which we recorded an expense within cost of revenue of $329 and $234 for the three months ended March 31, 2022 and 2021, respectively.

We recorded fees paid to members of our Board of Directors of $76 during the three months ended March 31, 2022 within related party expense in the accompanying condensed consolidated statement of operations.

A related party also provided certain corporate functions to MarketWise and the costs of these services are charged to MarketWise. We recorded $21 and $20 for the three months ended March 31, 2022 and 2021, respectively, within related party expense in the accompanying condensed consolidated statement of operations. We held balances of $475 and $1,037 as of March 31, 2022 and December 31, 2021 of related party payables related to revenue share expenses, call center support, and the services noted above. The balances with our related party are presented net and are included in related party payables, net in the condensed consolidated balance sheet.

We earned fees and provided certain accounting and marketing services to companies owned by certain of MarketWise’s Class B unitholders. As a result, we recognized $167 and $75 in other income, net for the three months ended March 31, 2022 and 2021, respectively. Related party receivables related to these services were $167 and $358 as of March 31, 2022 and December 31, 2021, respectively.

We lease offices from related parties. Lease payments made to related parties were $391 and $383 for the three months ended March 31, 2022 and 2021, respectively, and rent expense of $553 and $556 were recognized in general and administrative expenses for the three months ended March 31, 2022 and 2021, related to leases with related parties. At March 31, 2022 and December 31, 2021, ROU assets of $9,919 and $10,323 and lease liabilities of $7,359 and $7,545 are associated with leases with related parties.

In April 2020 we provided a loan to a Class A unitholder and recognized a related party note receivable from the unitholder of $1,148. We recognized $4 and $2 in interest income for the three months ended March 31, 2022 and 2021, respectively. The related party note receivable balance was $1,163 and $1,158 as of March 31, 2022 and December 31, 2021, respectively. The interest rate on the loan is variable and was 1.72% as of March 31, 2022. The loan is due in April 2025, but is required to be repaid within 30 days after we complete an initial public offering, including expiration of any related lockup conditions, which is expected to be met in 2022.