Substack's Central Otago co-founder in $US100 million capital raise for expansion

The money will be used to improve the platform and potentially include advertising.

Hamish McKenzie, a Kiwi media entrepreneur from Alexandra in Central Otago is now one of the three co-founders at the head of the rapidly growing Substack platform now valued at $US 1.1 billion.

The valuation follows the recent capital raise of $US 100 million. Details below.

Crux has benefitted from the unique Substack business model that allows independent publishers and authors to monetise their content without having to invest in complex and expensive website and subscription systems - in return for Substack keeping 10% of our reader revenue.

Substack posts are simultaneously published to our unique Substack channel as well as being emailed to a custom Crux subscriber database. Crux now has over 5,500 Substack subscribers with an increasing percentage of those paying monthly or annual subscriptions.

Subscribers can manage their own subscriptions via Substack - to cancel, pause, update credit card details or upgrade at any time.

Crux has no problem with taking up selected local advertising on Substack (not local councils for instance) as it will reduce the pressure on readers to fund our journalism and hire more journalists, without compromising our editorial independence.

Watch this video for a clear insight into the vision of Substack as explained by Hamish McKenzie in April this year.

Here’s how Capital Brief summarised the recent $100 million Substack capital raise.

The news: Substack has raised US$100 million in funding led by tech investment firm BOND and the Chernin Group, with participation from Andreessen Horowitz, Klutch Sports Group founder Rich Paul and Skims co-founder Jens Grede.

The numbers: The funding values the company at US$1.1 billion, almost 70% higher than its 2021 valuation of $650 million, The New York Times reported, citing people familiar with the deal.

Substack said it will use the money to invest in “better tools, broader reach, and deeper support for writers and creators,” and in its app, which now has millions of users.

The context: Founded in 2017, the startup recently surpassed 5 million paid subscriptions, according to Bloomberg, and launched a US$20 million fund to lure creators from TikTok and other platforms.

Once critical of advertising and social media, Substack is also now building a social network and planning to support native advertising in response to demand from creators.

What they said: “At Substack, we believe the heroes of culture are the ones who shape it. Technology should serve them, not the other way around. That’s why we’re building tools and a network to protect their independence, amplify their voices, and foster deep and direct relationships,” the company said in a blog post.

“These are the people who will lead us to a better culture, and a future we can believe in. This funding is our chance to get behind them. We’ll invest in better tools, broader reach, and deeper support for the writers and creators driving Substack’s ecosystem.”

The sources: Substack, Bloomberg, The New York Times