Substack shared ambitions to raise funding in 2021 but plans fell through as the market cooled for technology startups.
Substack laid off 13 people, mostly in human resources and support roles.
In a letter shared on Twitter, CEO Chris Best shared his intention of making Substack “robust” despite the market conditions.
“Our goal is to make Substack robust even in the toughest market conditions, and to set the company up for long-term success without relying on raising money – or, at least, doing so only on our time and our terms,” he said.
According to Crunchbase, Substack has raised a total of $82.4M since it was founded. Its most recent funding round was a $65M series B in March of last year.
Substack was looking to raise another $75 - $100 million in a series C round prior to the change in market conditions beginning earlier this year.
“Substack remains in a strong position. We continue to grow, we have a business model that works, and we have money in the bank. But the way we play to win in 2022 and beyond is different from the way we were playing in 2021,” said Best in his statement.
He continues, “We are extremely grateful to those who are departing the company, for their contributions and commitment. Their work has helped us get to where we are today, and they will always be part of the Substack story. I hope you’ll join me in thanking them for all they have done for Substack, and for building a better future for readers and writers.”
The layoffs are a significant blow to not only a startup but a new business model and era for news and media. Substack has recruited a number of high-profile writers over the past couple of years from a handful of major newsrooms.
In the space Substack has led in, subscription newsletters have also seen significant growth beyond Substack itself. Ghost, an open-source and popular alternative to Substack, has also experienced fast growth over the past few years.
Best ends his letter, “During challenging times in the world, great writing matters more than ever, and so our mission to help writers do their best work is as urgent as ever.”