Scoop: Newsletter platform Substack raises new funding
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Newsletter platform Substack has quietly raised around $10 million from a broad range of strategic investors, including Omeed Malik and Nate Silver, a source tells Axios.
Why it matters: Substack has more than three million paid subscriptions.
- Substack's original value proposition of empowering writers to connect directly with their audiences has attracted a diverse set of writers, but its "free speech" commitment has sometimes ruffled feathers.
- In January, for example, the company agreed to remove some publications that expressed support for Nazis.
- Nonetheless, it's continued to attrract new writers, despite taking a larger cut than do rival platforms like Ghost and beehiiv.
Catch up quick: Substack had raised more than $80 million prior to the must recent funding round, including Series A and Series B rounds led by Andreessen Horowitz. The Series B was at a $585 million pre-money valuation.
- It tried to raise a series C round in 2022, but pivoted instead to cutting costs.
- Substack then opened up an oversubscribed community investment round in 2023 to raise money from its writers. The company's pre-money valuation, according to its WeFunder campaign at the time, remained at $585 million.
- Substack has spent the last year focused mostly on product development. The platform now supports video, podcasts and paywalled chats.
Zoom in: Participants in the new $10 million round include Malik, whose investment fund 1789 Capital also backed Tucker Carlson's new media venture, alongside Substack writer Silver, Rocket Money CEO Haroon Mokhtarzada, Zynga CEO Mark Pincus, and AngelList co-founder Naval Ravikant.
- "We had inbound interest from strategic people, so we made space for them," said a spokesperson, who added that Substack wanted backers that represented a diverse set of views.
- The spokesperson confirmed the investment, but declined to comment on the $10 million total.
Editor's note: This story was corrected to reflect that the community fundraising was structured as a Series B extension, remaining at $585 million (not dropping to $585 million).
