Substack started as a popular newsletter publishing platform focused on helping writers reach paying subscribers, often criticizing social media and rejecting advertising.
Now, nearly eight years later, the company is heavily investing in creating a social network and becoming more receptive to ads.
To support these goals, the newsletter publishing platform has secured $100 million in funding from investors such as the Chernin Group, known for its investments in sports and media; BOND, a tech investment firm; Klutch Sports Group founder Rich Paul; venture capital firm Andreessen Horowitz; and fashion executive Jens Grede, co-founder of Skims. The funding round valued Substack at $1.1 billion, according to two people familiar with the deal.
Substack’s core model remains straightforward: users follow creators, and the company takes a 10% share of revenue from paid newsletter or podcast subscriptions. This writer-friendly approach fueled Substack’s early success, attracting over 5 million paid subscriptions and notable names like short-story writer George Saunders, historian Heather Cox Richardson, and many journalists leaving traditional newsrooms.
However, new backers are betting on a different growth engine: the Substack app, launched in 2022. It enables users to chat with creators, join live video conversations, and post through “Notes,” a feature similar to X or Bluesky.
The app now counts millions of users, which helps draw in more creators and subscribers, said CEO Chris Best and co-founder Hamish McKenzie. They also revealed plans to expand into advertising—a shift from the company’s earlier stance against it.
The newsletter publishing platform’s latest $1.1 billion valuation—a nearly 70% jump from its $650 million valuation in 2021—signals investor confidence in this new strategy.
“The network is growing,” McKenzie said. “We’re in this new phase where people can come to Substack and not just publish but also find new audiences and find new opportunities.” The company today is more interested in taking on YouTube than MailChimp.
The idea that Substack’s next stage of growth will rely on a social network and advertising may surprise some. McKenzie has long criticized both, condemning what he described as the “narrative frenzy” and “bedlam” fostered by toxic social media in posts on the platform. In another post, he labeled the ad model as “busted.”
He said in an interview that Substack embraced those models not as a change of heart but as “a recognition of new possibilities” enabled by the growth of the network and emphasized that Substack would not simply “copy and paste the old models that ruined social media.”
Substack’s investors are backing the company partly because of the promise these opportunities hold. In an interview, Mike Kerns, co-founder of the Chernin Group, said he believed it was “inevitable” the company would expand its advertising capabilities to benefit its writers.
“Their creators have told them that they want Substack to support advertising,” Kerns said. “We think it is a massive opportunity to launch a native form of advertising within the Substack ecosystem at some point.”
About two years ago, Substack’s co-founders scrapped plans to raise funds at a $1 billion valuation and cut roughly 14% of its workforce. Mood Rowghani, a general partner at BOND who co-led the latest funding round and will join Substack’s board, said the company anticipated several media trends—such as the rise of independent journalists—and simply needed time for those bets to pay off.
“Culturally, although some of these trends were certainly in motion, they weren’t at the level where they tipped the culture,” Rowghani said.
