A $65 million Series B is outstanding, even by 2021 requirements
Substack didn’t invent the paid e-newsletter, however the startup’s early success with the mannequin is attractive earlier backers to greater than double down on the media startup.
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Last night, Axios reported that Substack is “raising $65 million in new venture capital” at a valuation of “around $650 million.” As you’ve already guessed, Axios goes on to report that Andreessen Horowitz (a16z) will probably lead the funding.
That we’re seeing a16z pour extra capital into what we may name the alt-media house is just not a shock. The investing group is ladling even more cash into its in-house media efforts and has put a small archipelago of capital into audio-based social media app Clubhouse. Its inner publishing schedule is partly an try and get around traditional media; the Clubhouse universe is an inverted one wherein tech buyers are celebrities, producers and gatekeepers. And Substack is a spot the place publications have bled some well-known expertise, shifting the middle of gravity in media.
You can detect the theme.
Regardless, Substack’s new valuation and funding are eye-catching. This morning, I wish to acquire all that we are able to concerning Substack’s historic development in order that we are able to chew on its new valuation from the perfect vantage level. Let’s go!
$650 million?
Just a little historical past to kick us off. Crunchbase counts Substack’s complete funding so far at $17.four million. PitchBook places the quantity at $21.21 million, inclusive of debt. Both sources agree that the corporate’s most up-to-date spherical got here in July 2019. PitchBook pegs the corporate’s valuation at $48.65 million at that date.
Raising $17 million in money round 20 months in the past, no matter debt, is an quantity of capital that the corporate may simply have burned by by now. Raising extra funds is due to this fact not a shock.
But the dimensions of the brand new spherical is notable, as is its constituent valuation. Series A and B rounds have been growing in size lately. But a $65 million Series B would stand out, even by 2021 requirements. Not shockingly so, however sufficient that any firm elevating that sum at its implied degree of maturity would demand our consideration. That we’re all accustomed to Substack solely makes the sum extra curious.
