A16z joins newsletter platform Substack's $100m funding

Substack has raised US$100 million in a new funding round led by BOND and The Chernin Group, with participation from Andreessen Horowitz, Rich Paul of Klutch Sports Group, and Jens Grede, co-founder of Skims Body Inc.

This brings Substack’s valuation to US$1.1 billion.

Founded in 2017, Substack allows creators to sell paid subscriptions for newsletters.

It has recently expanded into podcasts and video content.

The platform currently hosts over 5 million paid subscriptions.

Earlier this year, it launched a US$20 million fund to attract creators from TikTok and has raised about US$200 million in total.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Substack’s remarkable growth reflects shifting creator economics

Substack’s journey from its 2017 founding to a $1.1 billion valuation demonstrates the rapid evolution of direct monetization for creators.

The platform has shown extraordinary growth in paid subscriptions, increasing from just 25,000 subscribers in October 2018 to 50,000 by mid-2019, and now reaching 5 million paid subscriptions in 2024 1.

This growth validates the sustainability of subscriber-based models, with Substack’s top 12 writers averaging over $160,000 annually, showing that creators can achieve financial stability with relatively modest subscriber bases of 1,000-2,000 paying members 2.

The model represents a shift away from ad-supported content, allowing writers to earn directly from smaller but more dedicated audiences rather than chasing massive viewership for advertising pennies.

Substack’s repeated funding success, from its early $15.3 million Series A round led by Andreessen Horowitz to its latest $100 million raise, reflects investor confidence in platforms that enable direct creator-to-audience financial relationships.

2️⃣ The newsletter renaissance faces intensifying competition

Substack’s success has triggered a wave of specialized competitors targeting its perceived weaknesses, with platforms like Beehiiv (founded by Morning Brew alumni) and Kit (formerly ConvertKit) gaining traction by offering creators lower fees than Substack’s 10% commission 3.