Substack acquires Yem amid broader subscription marketing push
Substack has acquired Yem, a small startup that helps newsletter writers grow their email lists through email marketing campaigns, Substack co-founder Hamish McKenzie told Axios.
Why it matters: The deal is part of a wider effort by Substack to help provide the writers on its platform with tools to grow their audiences organically by tapping into Substack's broader network of writers.
Details: With the deal, all of Yem's employees — of which there are fewer than 10 — will be joining Substack, McKenzie said.
- Yem is already working with several Substack writers to help them grow their email subscriber lists by using data to target free newsletter subscribers with marketing emails suggesting they pay to subscribe to the product.
- Deal terms were not disclosed.
Between the lines: In conjunction with the deal, Substack is also beginning to roll out a slew of new features that will help writers build up their subscriber lists for free.
- The company recently launched a new referrals feature, in which paid Substack subscribers can give their friends a one-month gift subscription to a Substack publication of their choice.
- It's experimenting with ways to add subscription prompts to the web pages that are used to house Substack posts being read on web browsers.
- The company recently launched an early beta version of Substack Boost, a feature that uses data to automatically show discounts and special offers to readers to incentivize them to pay for a subscription.
- In April, the company introduced a recommendations feature that helps Substack writers cross-promote other writers in the Substack network to their readers.
By the numbers: Early experiments with tapping into its own network of writers to promote subscriptions have so far been successful, McKenzie said.
- Today, Substack's network of writers drives more than 40% of all subscriptions across the platform and 12% of paid subscriptions. A year ago, Substack drove a "metaphorical zero" percentage of all subscriptions across the platform via its own network, per McKenzie.
The big picture: The deal marks Substack's fourth acquisition. The company acquired three small companies last year, including Cocoon, People & Company and Letter.
- Like many tech firms, Substack has had to reckon with the broader market slowdown that's driven a slew of layoffs and budget cuts across the industry.
- Substack said it would lay off 13 employees in June. The company has reined in some perks for writers, per The Information.