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Like Substack, the audio-based social network Clubhouse has gathered the bulk of its funding across numerous rounds led by a16z. Still, if Substack’s broader fortunes should change, it would be the second high-flying consumer company in a16z’s recent portfolio to have truly captured the public’s imagination, then lost momentum. The Times notes that Substack is one of many outfits right now facing new headwinds as investors snap their checkbooks shut amid rising interest rates that have severely dented tech stocks and slowed growth in the U.S. Other writers discover the economics aren’t compelling or simply burn out. Substack also faces churn, with some writers leaving the platform owing to Substack’s hands-off content moderation policy or for competing platforms that take a smaller cut. That’s not a lot of revenue for a company boasting a $650 million valuation. (It told the Times directly in a story last month that it has hundreds of thousands of paid newsletters now on the platform.) According to the Times, Substack separately told investors that it saw revenue of just $9 million last year. Substack told Axios late last year that the top 10 writers on the platform collectively generate $20 million in annual revenue. While that ambition has made Substack a point of fascination for traditional media companies - in addition to the Times, Substack has attracted extensive coverage in Vanity Fair, The New Yorker and many others over the years - investors may be wondering whether the business is capable of generating meaningful revenue. As CEO Chris Best told TechCrunch several years ago, Substack’s goal has always been to allow its users to create their own “ personal media empire.” The company later added support for podcasts and, just this month, it rolled out its own podcast player, along with new moderation tools, leaderboard categories and more.

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Writers were - and still are - encouraged to write for free those who charge a subscription pay 10% of what they collect to Substack, with Stripe, its payment processor, collecting another 3%. Substack originally launched as a way to turn newsletters into a paid subscription business, inviting anyone with an interest to hop on the platform and start writing for however much they want to charge their readers.

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It had earlier raised a $15.3 million Series A round led by a16z in 2019. Substack, based in San Francisco, was most recently valued at $650 million after closing a $65 million Series B round in March of last year led by earlier investor Andreessen Horowitz (a16z). According to its sources, Substack held discussions with potential investors in recent months about raising $75 million to $100 million at a valuation of between $750 million and $1 billion. Substack, the five-year-old newsletter platform that has aggressively positioned itself as a disruptive force in media, has abandoned efforts to raise a Series C round, The New York Times is reporting today.

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