Updated May 1, 2018

Substack raises $2 million to prove newsletters can help media

Co-founders Chris Best and Hamish McKenzie. Photo: Substack

Substack, a San Francisco-based startup that provides users with tools to publish paid (or free) subscription newsletters, has raised $2 million in seed funding.

Why it matters: The media industry has been scrambling to figure out how to pay for journalism and content, and a growing number of organizations believe subscriptions can be a solution.

Substack is betting on two content business elements: newsletters and subscriptions.

  • “Newsletters are a really good way to deliver content in a pattern,” co-founder and CEO Chris Best tells Axios. Readers can get through the entire email and be done, they come to the readers instead of the other way around, and are not dependent on algorithms to arrive. “And it’s also perhaps one of the last remaining platforms Facebook can’t touch,” added co-founder Hamish McKenzie.
  • Best and McKenzie say they and third co-founder Jairaj Sethi were inspired by successful paid newsletters like Ben Thompson’s Stratechery, whose readers are happy to pay for a consistent stream of content they find unique and valuable. “They’re paying for a trusted relationship or a trusted voice that they follow,” said Best, adding that curating content can be just as valuable to readers as producing original reporting.

But, but, but: Even though more readers are willing to pay for news, there's no guarantee that small newsletter writers will be able to build an audience and getting it to pay for content.

Substack says it’s not planning to integrate advertising features to its newsletter service, but does think about written content beyond news emails. For example, journalist Matt Taibbi is publishing his book, “The Business Secrets of Drug Dealing: Adventures of the Unidentified Black Male,” in the form of a newsletter via Substack.

Investors: The Chernin Group, Fifty Years, Zhen Fund, Garage Capital, Twitch CEO Emmett Shear, and Zynga co-founder Justin Waldron. It participated in Y Combinator's accelerator earlier this year.

Note: Axios contributor Bill Bishop is a Substack customer and early investor but had no involvement with this story. The story has been updated to add Substack's third co-founder and Bishop as an investor.

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World coronavirus updates: Cases surge past 720,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

There are now more than 720,000 confirmed cases of the coronavirus around the world, according to data from Johns Hopkins. The virus has now killed more than 33,000 people — with Italy alone reporting over 10,000 deaths.

The big picture: Governments around the world have stepped up public health and economic measures to stop the spread of the virus and soften the financial impact. In the U.S., now the site of the largest outbreak in the world, President Trump said Sunday that his administration will extend its "15 Days to Slow the Spread" guidelines until April 30.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7 p.m. ET: 718,685 — Total deaths: 33,881 — Total recoveries: 149,076.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 7 p.m. ET: 139,675 — Total deaths: 2,436 — Total recoveries: 2,661.
  3. Federal government latest: President Trump says his administration will extend its "15 Days to Slow the Spread" guidelines until April 30.
  4. Public health updates: Fauci says 100,000 to 200,000 Americans could die from virus.
  5. State updates: Louisiana governor says state is on track to exceed ventilator capacity by end of this week — Cuomo says Trump's mandatory quarantine comments "panicked" some people into fleeing New York
  6. World updates: Italy on Sunday reports 756 new deaths, bringing its total 10,779. Spain reports almost 840 dead, another new daily record that bring its total to over 6,500.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Trump says peak coronavirus deaths in 2 weeks, extends shutdown

Photo: Tasos Katopodis/Getty Images

President Trump is extending his administration's "15 days to slow the spread" shutdown guidelines for an additional month in the face of mounting coronavirus infections and deaths and pressure from public health officials and governors.

Driving the news: With the original 15-day period that was announced March 16 about to end, officials around the country had been bracing for a premature call to return to normalcy from a president who's been venting lately that the prescription for containing the virus could be worse than the impacts of the virus itself.

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