Who Owns Substack?

And... is this model sustainable long-term?

The Exodus begins…

I saw a Note earlier today from somebody new to Substack who had also just signed out of all the Meta platforms. Of course I can’t find that Note now - searching Notes is not a function that Substack currently offers – but this new-ish user expressed her gratitude to have broken out of the ‘oligarch controlled, advertising supported’ social media gulag.

That got me to wondering, “who owns Substack?”

So I asked ChatGPT:

Substack is a privately held company, founded in 2017 by Chris Best, Jairaj Sethi, and Hamish McKenzie. The ownership of Substack is shared among its founders, employees, and investors.

The company has raised funding from prominent investors, including Andreessen Horowitz, Y Combinator, and others. As a private company, it does not publicly disclose detailed ownership stakes, but its founders and key stakeholders likely hold significant shares.

That all sounds reasonably non-oligarch-ish. Except for the VC money. Venture Capital is kinda the life blood of the digital oligarchy. Those guys always want a return on their investment, and preferably by several orders of magnitude.

Since it’s a private company, Substack is under no obligation to report its financial results. Its business model consists of:

…taking a 10% commission from writers’ subscription revenues. The platform has attracted numerous high-profile writers, with the top 10 authors collectively earning more than $25 million annually. However, the company continues to invest heavily in growth initiatives, such as launching new features and expanding its content offerings, which has delayed its path to profitability.

I think “Notes” is one of those newer features that is adding great value to the Substack experience.

As for profitability:

As of early 2025, Substack has not yet achieved profitability. The company has experienced significant revenue growth, with estimates indicating $29 million in revenue for 2023, up from $19 million in 2022. Despite this growth, Substack continues to prioritize investment and expansion over immediate profits. Co-founder Hamish McKenzie has emphasized that the company’s focus remains on “investing in and continuing to grow the business.”

That approach has worked for other companies in the digital era, so there is no reason to think it couldn’t work here, too. Of course, it has also not worked for a whole lot more companies than it has worked for. You just don’t hear about them once they’ve vanished from the firmament.

The report above says that just ten writers on Substack earned $25-million of a total revenue figure of $25-million. How the rest of us (which doesn’t really include me since I have yet to turn on the paywall) fare then depends on how many paying users there are:

As of early 2025, Substack hosts over 17,000 writers who offer paid subscriptions for their newsletters. These writers cater to a diverse audience, contributing to the platform’s more than 3 million paid subscriptions.

Let’s do that math: You’ve got $4-million to divide among 17,000 writers = ~$235.00 year per writer.

Is that a sustainable model?

Right now, every Substack user is on their own to set subscription rates¹ and charge subscribers individually. One wonders what sort of boost in paid subscribers the site would experience if there was some way to bundle several subs into a single monthly charge. I wonder if that’s on anybody’s punch list for new features?

I would love to see what sort of growth Substack has experienced in this first month of the new year / administration, amid the spreading sentiment to “get off Facebook” etc.

That doesn’t assure its long-term viability, but there sure a lot of people are pulling for this venture to succeed.

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Edit/Added Feb 2, 2025: If you’re newish to Substack and getting lost in the UI, I just posted “A Substack Primer for Noobs” that reveals everything I’ve learned about navigating the site in my first two weeks on the platform. It might answer some of your entry-level questions.

And if you find any of this useful, then please…

… preferably dark roast, black. If medium roast, with a splash of half-n-half. Thanks!

1. Postscript – Jan 30, 2025: I recently found my way in to the “set up paid subscription” module and discovered that the platform enforces certain minimums: You can’t charge less than $5/mo or $30/yr. I was actually thinking of charging like $1 or $2/mo, thinking, “Hell if I can get 1,000 “true fans” to shell out $2/mo for my Pithy Postings, that would be almost life-changing (according to my financial advisor, anyway). I can’t quite fathom why such pricing is not permitted. Ah well, one more item for the Substack Suggestion Box (coming soon to a Post near you).