Substack Is Growing Up (and Thinking About Adding Another Revenue Stream For Writers)
Here’s What This Means
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My Medium friends can read this story over there as well.
Substack is in the news, but not because a famous writer just defected from The New York Times.
This time it’s all money.
Substack is quietly raising money again. And there’s a lot more going on beneath the surface than another VC round, it seems.
The Mobile App Is Booming
Substack’s mobile app has been growing nicely.
It’s growing, but more importantly, it’s converting more. That’s the point.
The app is now one of its biggest engines for turning readers into paying subscribers. Not just inbox scrollers, but actual, wallet-opening, $5/month readers.
That’s a big deal.
Instead of relying entirely on individual writers to drive their own traffic (via Twitter, LinkedIn, Medium, or whatever), the app has become its own little social media universe. A feed, an ecosystem, a discovery engine.
This is good for readers I hope. It’s definitely great for Substack, because it means the company can start taking more cash for helping it and writers grow, again, hopefully.
Fo me, the app still is one of the minor sources of subscribers and conversions. But I can see a bit of growth there as well.
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The Next Fundraising Round
Substack seems to be in the middle of a raise between $50 million and $100 million, which would push its valuation beyond the $700 million mark from its last round.
That’s quite a jump. And they have strong numbers to back everything up:
$45 million in annual recurring revenue (ARR).
$450 million in total revenue flowing to creators.
500,000+ writers on the platform.
Growing steadily & attracting big name after big name
A New Revenue Stream
Perhaps the most interesting bit (at least for me): Substack might be opening the door to sponsorships.
What, sponsorships? Yeah.
Another way to make money directly. Apart from paid subscriptions.
That’s huge, I believe.
Because while reader subscriptions are great, they’re not always sustainable, especially for smaller or niche writers. There is such a thing as subscription fatigue. And we really have enough to pay for monthly.
Sponsorships are an alternative route.
You might be familiar with Beehiiv. It’s another newsletter/writing/email marketing platform. And a good one.
Beehiiv is already doing sponsorships and has been for a while. They’re helping creators connect directly with brands and slotting sponsored placements right into newsletters.
If Substack rolls out its own in-house sponsorship network, it could introduce new monetization options without forcing writers to chase brand deal, themselves. Or relying on third-party stuff. Or affiliate marketing. All the things I do on the side, basically.
Even better: It could/should mean that Substack starts sharing the sponsorship revenue, instead of relying solely on its cut of subscription fees.
This would be a smart, scalable way to grow. For both sides. If done correctly. With good partnerships, fitting sponsors, and elegant design and use.
What This Means for Writers
If you’re already on Substack:
Mobile Is Your Friend: Optimize your content for mobile readers. The feed (and the app) is becoming the new inbox.
Sponsorships Might Be Coming: Be ready. If Substack rolls this out, you might suddenly have access to brand deals without leaving the platform.
Substack Is Becoming a Platform, Not Just a Tool: It used to be “blogs and email with a paywall.” Then podcasts. Then video. Then social media. Now it’s looking more and more like a complex ecosystem. With writers and readers in mind, and monetization to back it up.
The Bottom Line
Substack is not a little newsletter company with a slick text editor.
It’s growing up, raising money, building a proper app ecosystem, and flirting with sponsorships.
Newsletters aren’t just a trend, they’re here to stay.
The fundraising is interesting. But the real story is what it enables. More tools for writers, better discovery, and more sustainable monetization options.
Could be good. Right?
I’m interested in how this could work to benefit small creators instead of just putting more money into the hands of already big creators who have recently started substacks.
This is such a grounded take on what actually matters, not just the money, but what the money enables. The shift from “newsletter tool” to full-blown creator ecosystem is real, and if sponsorships roll out smartly, it could unlock way more paths for indie writers to actually sustain this work.📱✍️💸