Exclusive: Graydon Carter's Air Mail raises $17 million

Air Mail, the subscription-based digital magazine company launched by former Vanity Fair editor Graydon Carter, has raised a $17 million series B funding round, Carter tells Axios.

Why it matters: The money will be used to fuel Air Mail's expansion into new editorial verticals and product lines, including podcasts and a book imprint.

• The round was led by Standard Investments with participation from existing investor TPG Growth and RedBird Capital Partners, a new investor.
• Standard Investments will have two seats on Air Mail's board, including one occupied by Standard Industries co-CEO David Winter. As a part of the deal, RedBird will have an observer role on board.
• Air Mail raised a $15 million series A funding round in 2019 at launch, Carter confirmed, bringing its total amount raised to $32 million.
• The digital magazine has focused on selling subscriptions and sponsors for its weekly Saturday email blast. It works mostly with high-end advertisers, like Hermes and Prada. Moving forward, it's investing more in commerce.

By the numbers: Carter said the company now has 130,000 readers, which includes paid subscribers and people who have a trial subscription. The number of subscriptions grew more than 50% year-over-year, he added.

• Trials last four weeks and "90% of trials convert to paid subscribers at the end of their trials," noted Air Mail's Chief Operating Officer Bill Keenan.
• An Air Mail subscription today costs $80 annually, up from $50 at launch. Carter noted that the company, which he founded in 2018, is not yet profitable.
• The company now has nearly 50 employees, up from 30 in April and 10 at launch.

The new investment will go towards improving the technology that powers two of Air Mail's technical products, including its "Arts Intel Report," a searchable digital arts database, and its "Air Supply" ecommerce website.

• Commerce, Carter noted "wasn't even in our original business plan," but has shown strong growth, doubling in revenue between the second half of 2020 and the first half of this year. "We expect it to double again by the end of the year."
• In 2021, the company also began experimenting with its own branded retail products, like Air Mail branded caps, jackets, totes, coffee, and sleepwear. Carter said the company plans to continue selling its own products.

Between the lines: Air Mail launched with a focus on covering stories that cater to an influential news consumer across topics like arts, politics, culture, literature, film and television, fashion, the environment, etc.

• It's now in the early stages of developing new monthly digital magazines for specific verticals. "They will be similar to the magazines of yore, but within the trademark AIR MAIL style and branding format," Carter said.
• The company also plans to expand its podcast business. It debuted its first podcast called "Morning Meeting" (M.M.) in 2020. It plans to launch three more in 2022.

Despite billing itself as a digital magazine, Air Mail will continue to invest in a few specialized print projects. The company plans to launch its own book imprint next year, Carter said.

• It also plans to continue printing select print editions of broadsheet newspapers, called "Printed Matter." Carter said the company will published four sponsor-supported imprints next year.
• The company launched its own branded newsstands in Milan and London in the past two years. Carter says New York and Los Angeles are next.

The big picture: The reinvention of the print magazine online continues to be a focus of investors and dealmakers.

• IAC’s Dotdash recently closed its $2.7 billion acquisition of Meredith's National Media Group. It plans to reimagine Meredith's popular print brands, like Better Homes and Gardens and All Recipes, for the digital era.

Go deeper: Graydon Carter's Air Mail outlines ambitious growth plans