Team Startupcity

• Substack raises $100 million, valuing the company at $1.1 billion.
• Plans to expand its social media features and enter the advertising space.
• Platform now hosts 5M+ paid subscribers and millions of app users.

Substack, the erstwhile ad-averse newsletter platform that made independent writers powerful, has raised $100 million in a new funding round.

 The funding is pegging the company at $1.1 billion, doubling from its valuation of $650 million in 2021. This development marks Substack's aggressive transition from being a pure newsletter platform to that of a wider creator-led social network.

Supporters in this round are some high-profile investors including The Chernin Group, BOND, Andreessen Horowitz, Rich Paul, founder of Klutch Sports Group, and Jens Grede, co-founder of the shapewear company Skims. The new capital will fund Substack's increasing investment in social features and its foray into advertising an space that it had previously publicly criticized.

Established almost eight years ago, Substack established itself on the strength of a straightforward model: creators receive subscription revenue directly from readers, with the platform taking 10% of that. Direct-to-reader was its appeal to writers who were disenchanted with the mainstream media and to big-name talents such as author George Saunders and historian Heather Cox Richardson.

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Now, Substack is wagering on expansion with interactivity. Since rolling out its app in 2022, the platform has added live video discussions and Notes its response to social feeds like X and Bluesky. Co-founders Chris Best and Hamish McKenzie say the app now reaches millions of people, enabling creators to connect with audiences beyond newsletters.

Substack’s leadership believes this shift is pivotal. “We’re entering a new phase,” said McKenzie. “Substack is no longer just a place to publish it’s a platform where creators can connect with audiences, grow communities, and unlock new opportunities.”