Substack Raised Another $100 Million, Which, I Bet, Is Already Being Flushed Down the Same Toilet as Their First $100 Million
One last post on my recent Substack kick. Yesterday I linked to Ana Marie Cox’s scathing analysis of Substack’s financials. She published that on June 23, and wrote about Substack’s $100 million funding round, with a $1 billion valuation, in the future tense. Substack indeed closed that round in mid July, raising $100 million, with a valuation of $1.1 billion. After which their triumvirate of cofounders sat for an apparently brief “interview” with Benjamin Mullin and Jessica Testa of The New York Times:
Substack’s business model is simple: Users subscribe to follow creators on the platform, and the company takes a 10 percent cut of the revenue when those creators charge for a newsletter subscription or access to a podcast. That approach initially made Substack a writer’s haven, resulting in more than five million paid subscriptions and a stable of publishers, including the short story master George Saunders, the historian Heather Cox Richardson and an exodus of journalists from traditional newsrooms.
But the latest investors are betting on an emerging product that could amplify its business. Substack’s app, introduced in 2022, allows users to chat with their favorite creators, watch live video conversations and write and share posts on their own feeds through Notes, a feature similar to X or Bluesky.
