Substack Drops Fund-Raising Efforts as Market Sours

Substack, the ballyhooed newsletter platform that has lured prominent writers with the promise of cashing in on their relationships with readers, has dropped efforts to raise money after the market for venture investments cooled in recent months, according to people with knowledge of the decision.

Substack held discussions with potential investors in recent months about raising $75 million to $100 million to fund the growth of its business, said the people, who would speak only anonymously because the talks were private. Some of the fund-raising discussions valued the company at between $750 million and $1 billion, they said.

The decision is another sign of the stark shift from the recent go-go years of free-flowing cash for young start-ups, particularly buzzy, consumer-facing ones like Substack, which has raised at least $86 million over three rounds of funding, according to PitchBook, which tracks funding.

Now, investors are preaching austerity and halting new deals, particularly for companies that spent aggressively on growth with no signs of profits. Though Substack is still hiring, other firms have grappled with layoffs or lower valuations, with some comparing this downturn to the years after the 2008 financial crisis or 2000 dot-com bubble.