Despite attracting prominent figures in the independent writing sphere, Substack continues to operate at a loss. The platform, known for hosting newsletters and blogs with substantial digital subscriber bases, is yet to achieve profitability. Co-founder Hamish McKenzie explained to The New York Times that while profitability is within reach, the company’s current focus is on investing in growth.
Elon Musk, the owner of X, reportedly expressed interest in acquiring Substack during a conversation with CEO Chris Best in April 2023. Musk even proposed appointing Best as the chief executive of the merged entity. However, Best declined the offer.
The narrative of potential profitability has been a recurring theme for Substack. Best mentioned in a 2020 interview with Nilay Patel on Decoder that the company could achieve profitability rapidly if it curbed its expenses. However, the primary focus has always been on sustained growth and securing investments to ensure long-term viability. Best emphasized the importance of fundraising, stating that without it, the company’s future could be at risk.
Recent efforts by Substack to bolster its business and financial position have included raising capital from its writers, launching its own alternative to Twitter called Notes, and focusing on political content, which has proven to be successful on the platform. According to The New York Times, political outlet Zeteo by Mehdi Hasan ranks fifth on the politics leaderboard on Substack, generating an estimated $3.9 million in annual revenue.
