- Newsletter publishing platform company Substack announced it has raised $15.3 million in Series A funding led by Andreessen Horowitz
Substack — a newsletter publishing platform company — announced it has raised $15.3 million in Series A funding, according to Fortune. Andreessen Horowitz led the round of funding and it was joined by Y Combinator.
Substack was founded by Hamish McKenzie (former reporter at PandoDaily, lead writer at Tesla, and editorial advisor at Kik), Chris Best (co-founder and former CTO at Kik), and Jairaj Sethi (former head of platform at Kik).
What does Substack do? The platform enables writers to launch free or paid subscription newsletters without upfront fees. And Substack generates revenue by taking a 10% cut of subscription revenue. Currently, there are 50,000 paying subscribers on the Substack network.
Bill Bishop — the Publisher of the Sinocism China Newsletter — was the first person to launch a newsletter on Substack. And Bishop charges readers $15 per month to access the newsletter. And he started achieving six figures of revenue from the platform.
After Substack first launched, the founders of the company started reaching out to individual writers with large followings. They were hoping to recruit Andrew Chen — who wrote about the Silicon Valley culture. Although Chen did not join Substack, he became a general partner at Andreessen Horowitz.
“When Hamish first told me about it, it was just an idea,” said Chen via Fortune. “But when they later told me about how fast it’s growing and how writers are already making a nice living through the platform, I thought, ‘Huh. If this is already working now, just how big could it get?’’
The funding deal went from conversation to signed term sheet in about a week. And Substack is going to use the funding for hiring developers and writer relations employees.
