I bought excited — very excited — once I discovered that Substack’s fairness crowdfunding effort would lead to it releasing monetary outcomes.
Sadly, as a consequence of guidelines and the timing of the fundraise, Substack just isn’t required to element its financials for 2022, and so the startup launched laborious knowledge for 2020 and 2021 together with sure user-specific metrics for final 12 months. This gives an attention-grabbing, if incomplete, image of the corporate’s well being.
The Exchange explores startups, markets and cash.
Read it each morning on TechCrunch+ or get The Exchange publication each Saturday.
I anticipated to spend a while this morning weighing in on the morality of Substack’s option to not share its audited 2022 outcomes, however Dan Primack nailed that argument this morning in Pro Rata. Since I can’t enhance on his phrases, we will depart that time to Axios and as a substitute focus our fireplace on parsing the information.
So to kill time whereas we nurse our post-Y Combinator demo day hangovers, let’s dig into Substack’s progress mannequin (inclusive of its most up-to-date non-financial knowledge), ponder over the corporate’s present monetary well being, after which evaluate its upcoming capital elevate to its potential money wants.
This will likely be enjoyable. Think of it like a fast take a look at a partial S-1 submitting, however for a Series B firm. Sound good? To work!
There’s a whole lot of knowledge, however not sufficient
You can learn all of Substack’s launched monetary outcomes right here in case you need to play alongside.
To begin, let’s observe that the corporate raised a lot of cash by way of 2021 to spend money on its platform and develop its person base. So whereas we contemplate its outcomes by way of 2021, it’d be sensible to keep in mind that the corporate was growth-oriented on the time. How did that work out?
Substack’s progress mannequin is pricey, if efficient
Substack’s gross income scaled by over 400% to $11.9 million in 2021 from $2.4 million in 2020. That’s exactly the kind of top-line growth that enterprise backers need to see from a startup in its investing cycle. The firm had introduced its huge $65 million Series B in early 2021, that means that it had entry to that money within the 12 months.
