With the number of people using email approaching 5 billion worldwide, newsletters delivered regularly to people's inboxes are a sticky way to grab attention, no matter what you're writing. It continues to look like. Now, in a sign of the medium's popularity, one of his startups, which is building a platform for creating and distributing newsletters, has announced funding. New York-based beehiiv has raised $33 million and plans to use the funds to expand its platform's technology as well as its business.
NEA is leading the Series B, with participation from Sapphire Sport and previous backer Lightspeed Venture Partners. The company has not disclosed the valuation for this round, but it has now raised $46.5 million.
Money is flowing in following some significant growth. When we covered beehiiv's $12.5 million Series A (Lightspeed-led round) in June 2023, the company had 7,500 active newsletters with 35 million unique readers and 300 million monthly impressions. It was 50 million. The company currently sends out 1 billion emails a month from around 20,000 active newsletters (though it doesn't say how many unique readers it has, this number is no doubt growing). Newsletter users include individual writers (and personal “brands”: Arnold Schwarzenegger is also one of its customers), but also large organizations such as Boston His Globe His Media and Brex .
It seems like there are a lot of newsletters, but beehiiv is looking for more. Last year, the startup also built and launched an ad network that caters to different price points based on different features and functionality. (The company claims its customers earn a total of about $1.2 million in revenue on average per month on its platform.)
CEO and co-founder Tyler Denk said the ad network the company deploys allows it to connect specific campaigns to niche audiences that are most likely to see and respond to those campaigns. He described it as the “holy grail” for advertisers. “This also means these newsletters can be monetized with advertising, such as Netflix sponsorships,” he added.
Whether niche or not, the business model for digital advertising is based on economies of scale, so invest in more marketing and sign deals with larger publishers to bring in more inventory. The emphasis will be placed on
“It's only been two years and we've sent a billion emails,” Denk said, describing the period from its founding in October 2021 to the present as “from zero to one.”
“Obviously, that's the most difficult thing. Now that we have scale, we're looking for network effects,” he said.
Denk and co-founders Benjamin Hargett and Jacob Hurd previously worked together at Morning Brew, a publishing company that pushed the boundaries of newsletter usage, and their background to date has focused primarily on publishers and “content.” Helpful for beehiiv, which is focused on. But when asked if and when beehiiv would consider building out other parts of the business, Denk said it's possible over time. I didn't exclude gender. “Email is email,” he said.
The company is not without a wide variety of competitors. In addition to Substack (arguably the startup that brought newsletters back into the conversation when they started exploding a few years ago), there are open source competitors. These include Buttondown and Ghost. The company announced earlier this month that it would begin supporting ActivityPub to integrate more tightly with other social platforms using the “fediverse” format. Services such as HubSpot and MailChimp also stem from the strong DNA of the email marketing field. There are many others.
One challenge is whether it's enough to differentiate your business in a very crowded pool. Denk said one of the ways he hopes beehiiv wants to build on its track record and differentiate itself from others is by making it easy for customers to migrate to its platform and use APIs to connect customers to their CRM and other services. I mentioned that it is possible to use it in conjunction with other tools. prefer to use.
Beehiiv's other big job is measuring and matching the preferences of consumers and their customers. Among the latter group, competition for newsletters may become a little easier in the short term, as publishers wring their hands in light of a variety of factors that make their job increasingly difficult. do not have.
They are battling the quirks of Google and its algorithms. The decline of Facebook as a traffic engine. A huge shift from reading on the internet to the rise of apps like TikTok and Instagram and their highly visual formats. And what that means for advertising and traffic. Some people consider paywalls, others don't.
All of this means that now could be a great time for newsletters and companies like beehiiv to really flock in (sorry!). But anything comes with real risks when it's at its “peak.” And these days, that applies not only to viral platforms but also to established media. Peak interest also brings consumer challenges. Consumers are very enthusiastic about newsletter subscriptions these days, but as reading lists grow longer, maintaining that interest is difficult for publishers and, by extension, newsletter platforms.
Investors still believe that even with these many “what ifs”, beehiiv has a great opportunity.
“Email is one of the most enduring digital channels, but it offers immense untapped potential for publishers to grow and monetize newsletter audiences,” NEA partner Daniel Ray said in a statement. “There is,” he said. “We believe that Tyler and his team are pioneers in this space and truly customer-centric builders. We are proud to partner with them to make beehiiv a great choice for both creators and advertisers. We are thrilled to be establishing him as the primary email platform for the company.”