Substack confirms $65M raise, promises to ‘rapidly’ expand its financial backing of newly independent writers
This afternoon Substack, a paid-newsletter startup, confirmed that it has raised $65 million, as initially reported by Axios. TechCrunch dug into the math behind the financing here. As anticipated, a16z led the new financing.
What's in store from the now Series B-backed company? Product work. The company wrote that it intends to rapidly" expand its Substack Pro program, which pays writers for a year to assist them in launching their own minipublication; Substack takes a larger cut of Pro user earnings during their first year, reverting to its usual split the next.
The Substack Pro model has attracted controversy in recent days, with some writers - both on Substack and not - criticizing the startup for opacity in whom it pays via its Pro program; some have argued that Substack is subsidizing anti-trans writers in particular.
The company is motoring ahead on building out its infrastructure regardless, stating in its note that it intends to spend some of its new capital on creating increasingly powerful subscription-publishing tools," and a support infrastructure for independent writers." More tooling and more assistance could prove key to enticing more writers from their current employers - or Substack rivals - to its platform.
The company also wrote that it plans to boost its community building and local news efforts.
Substack did not provide material new growth metrics, instead saying that it has more than half a million people" paying for writers on its network; that figure is unchanged from a January figure that Bloomberg reported.
As Facebook and Twitter build out their own newsletter efforts, and rival startups like Pico and Ghost offer related services, the paid-media space is a hot market today. At issue is more than the future homes for a handful of well-known writers with large audiences. The various tech companies competing in the space are each wagering that the long tail for paid writing is long, and that individuals of many profile sizes will be able to attract and hold a paid audience.
After what feels like decades in which online writing was devalued to commodity prices, we're startling to find ourselves in a world where various well-financed companies are competing for our pens.