Profile of SubStack the company, founding, SubStack investors and Growth metrics

SubStack Revenue Growth and Paid subscriber growth

What does SubStack do?

SubStack makes it simple for a writer to start an email newsletter that makes money from subscriptions. They provide a platform to publish, distribute and monetize independent writing by paid subscriptions from readers. This is different from most media businesses which make more money from advertisers than subscriptions.

When was SubStack founded?

SubStack was founded on 28th July 2017 at 1448 Cortland Ave, San Francisco CA 94110, which is the home of co-founder, Chris Best. The company, SubStack Inc. was incorporated on 29th of November 2017 in Delaware. The California state filing was completed on July 27th 2018.

Who are the founders of SubStack?

SubStack has 3 founders. Hamish McKenzie, who was a part time writer at Kik; Chris Best, who was the Chief Technology Officer at Kik and Jairaj Sethi, who was the head of platform and lead developer at Kik.

Hamish McKenzie serves as the Chief Operating Officer (COO of SubStack); Chris Best serves as the Chief Executive Officer (CEO of SubStack); and Jairaj Sethi serves as the Chief Technology Officer (CTO).

Where is SubStack located?

SubStack headquarters are in 244 California St, Unit 204, San Francisco, CA 94111.

What is SubStack’s mission?

SubStack’s stated mission is to “Make it simple to start a publication that makes money from subscriptions”. It has evolved from: Substack’s mission is to make it simple for a writer to start a paid newsletter.

Is SubStack public?

No, SubStack is a privately held company, with investments from multiple individual investors and institutional capital from A16Z, Garage Capital, YCombinator and Zhen Fund.

How much money has SubStack raised?

SubStack has raised over $17 Million. There is a mention of $19,086,734 on July 23rd, 2019 in a document filed with the SEC.

SubStack raised $120K from YCombinator as part of Winter (Jan) 2018 cohort.

In May 2018, SubStack raised $2.2 Million in a seed round from Bill Bishop, The Chernin Group, Fifty Years, Zhen Fund, Garage Capital, Twitch CEO Emmett Shear, Zynga co-founder Justin Waldron and others.

On July 16th, 2019, SubStack raised $15.3 Million in a Series A round with Andrew Chen from A16Z as the lead investor and YCombinator also participating.

Who are the investors in SubStack?

According to the filing with the SEC, there are over 32 investors in SubStack since their inception. They include among others:

1. Wie Guo

2. VentureSouq

3. UpHonest Capital

4. ZhenFund

5. YCombinator

6. The Chernin Group

7. Kenji Niwa

8. Justin Waldron

9. Garage Capital

10. Funders Club

11. Emmett Shear

12. A16Z – Andreessen Horowitz

13. Fifty Years

What is SubStack’s business model?

SubStack charges a fee for paid newsletters. The fee is 10% of the newsletter’s price. An overview of SubStack pricing indicates they also have payment processing fees (that goes to Stripe which are about 3% on average of the newsletter’s price.

SubStack does not charge for free newsletters. In the industry this is usually referred to as a freemium model.

How many people does SubStack employ?

As of August 2020, SubStack has about 20 employees across technology, writer operations and marketing.

Is SubStack hiring? What jobs are available at SubStack?

SubStack has 10+ open positions in engineering (technology and data), Writer team (recruitment, community and strategy) and support listed on the SubStack careers page.

Is my SubStack subscriber list confidential?

SubStack accidentally revealed hundreds of subscribers’ emails on Jul 2020, by emailing them in CC to an entire list. Other than that incident, there are no other reported incidents of data breach at SubStack. As a newsletter editor, only you will have access to your subscriber list.

What is SubStack’s revenue?

Since SubStack is a private company, they do not disclose revenue. However, doing a simple estimation based on publicly available data indicates they had over 100K paying subscribers (July 2020). Some newsletter brand such as The Dispatch alone, doing over $1 Million in revenue on SubStack. SubStack charges 10% of all newsletter fees. Given the average subscriber pays about $50 – $100 annually, we can estimate SubStack revenue is in the $1 Million to $2 Million run rate range.

SubStack Annual Recurring Revenue Growth and Paid Subscriber Growth

Do you have a copy of the SubStack Pitch Deck?

SubStack pitch deck for raising Series A indicates they were looking to raise over $17 Million after having raised over $15 Million from A16Z and YCombinator.

Their positioning in the pitch deck was

We empower any individual to launch their email newsletters that make money from subscriptions of “super true readers”

In the pitch deck they also indicate that they view Revue, Pateron and ButtonDown as direct competitors and Medium as secondary.

Is SubStack growing?

SubStack is growing dramatically. Of all reported metrics, there are 3 that we track. Paid Subscriber Growth, Average Revenue Per Subscriber, Paid Newsletter Growth and Annual Recurring Revenue Run Rate. SubStack’s core growth loop starts with great creators who attract subscribers, which attracts other great creators to the platform.

From July 2017 to July 2020, SubStack has grown subscribers by 110,000 and Annual Recurring Revenue (Run Rate) to over $1 Million. 2019 growth in subscribers was 355% and 411% in ARR.

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