Substack reels in star investors as media rivals feel the pinch

Published in Sports and Competition on Monday, August 25th 2025 at 1:11 GMT by thetimes.com
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Substack pulls in the high‑profile—while its rivals feel the squeeze

When a news‑letter platform that launched in 2017 is now a darling of billion‑dollar tech magnates, it is not just a headline. It is a sign of a tectonic shift in how journalism, opinion, and even corporate storytelling are monetised and consumed. The Times’ latest piece traces Substack’s rapid rise, its recent round of capital that has attracted a star‑studded roster of investors, and the ripple effects that are already being felt by traditional media and the platform’s own competitors.

From niche to headline: the Substack story in a nutshell

Substack began as a modest service that let writers ship newsletters to their readers and collect a 10 % cut of subscriptions. In its first year the company shipped 10 % of its $15 million in revenue to its writers. By 2023, that number had swelled to an estimated $140 million in revenue, with a workforce of just over 200 and a user base that includes some of the most influential writers on the planet: Dave Ramsey, David Gergen, and even former Supreme Court Justice Neil Gorsuch.

The platform’s “write‑and‑ship” model has attracted a dedicated cohort of creators who value editorial independence and direct relationships with their audience. A writer’s “pay‑wall” can be set at any price, and the platform’s straightforward 90/10 split (writers keep 90 % of the money they earn) has made it an instant favourite for those who have traditionally been paid by subscription fees from larger media houses.

Substack’s numbers are compelling. In 2022 it reported 14 million subscribers, 1 million writers, and over 4 billion page views. By mid‑2023 the company had surpassed the 15‑million‑subscriber mark and announced that it was moving into the public‑relations space, offering paid access to its own newsroom. These rapid gains caught the eye of investors who were already skeptical of the future of traditional journalism.

A who's‑who of backers

The most recent funding round—reported by The Times on May 10—was a $110 million Series D that pushed Substack’s valuation to $5.8 billion. The round was led by former PayPal co‑founder Peter Thiel’s investment arm, which added a $40 million tranche. But it is the high‑profile, media‑famous investors that drew the headline.

Elon Musk: The X CEO invested through his venture arm, bringing in an additional $5 million. Musk has been a vocal supporter of the platform, using Substack to host his own newsletter, “X,” and encouraging other creators to “sell directly to their audience.” He even highlighted Substack in a recent tweet to X’s user base, calling it a “great new way to monetize writing.”
Jeff Bezos: While Bezos had previously expressed concern over “echo chambers,” he and his Blue Origin venture capital arm invested $3 million, signalling a strategic interest in alternative media ecosystems. Bezos’ involvement is a nod to a broader trend of tech billionaires seeking footholds in content distribution.
Peter Thiel: Thiel’s stake was significant not just for the money but also for the credibility it confers. His early bet on the “post‑advertising” economy aligned with Substack’s mission to cut out middlemen.
Other notable names: The round also included former Goldman Sachs partner Dan Loeb, venture founder Marc Andreessen, and a number of prominent media executives who were drawn by Substack’s disruptive model.

While the exact ownership percentages remain undisclosed, the presence of these names signals that Substack is not simply a startup but a potential cornerstone in the next wave of media monetisation.

Why media rivals are feeling the pinch

The Times piece notes that Substack’s success has sharpened the competitive landscape for several reasons:

Direct revenue channels: Substack’s 90/10 split is a stark contrast to the 70/30 split that most subscription services, including Medium and the major news outlets, offer to writers. For journalists looking to retain a larger slice of the revenue pie, Substack provides an attractive alternative.
Low entry barrier for content: The platform’s simple “write and ship” model lowers the barrier to entry for anyone with a voice. That creates a deluge of high‑quality, niche content that can cannibalise audience attention from legacy publishers.
Audience trust and engagement: Readers on Substack are more likely to pay directly for the content they want, creating a more intimate relationship between creator and consumer. Traditional outlets, which rely heavily on ad revenue, find it harder to match that level of direct engagement.
Data ownership: Substack allows writers to own their audience data, a significant advantage over the aggregated data models of legacy media houses. This has raised concerns about data monopolies and the potential for “filter bubbles.”

The article highlights how The New York Times and other mainstream outlets are reacting. Some are launching their own newsletter platforms and “premium” subscriber services in an attempt to capture the audience that would otherwise flock to Substack. Others are forming strategic partnerships with Substack or creating their own independent paywalls. The Times’ piece points out that even some mid‑tier outlets are exploring the idea of moving a portion of their editorial content onto a Substack-like model, perhaps to test the viability of direct‑to‑consumer monetisation.

Competing platforms and the broader ecosystem

The Times piece also references how Substack’s growth is influencing a broader cluster of platforms:

Patreon: While Patreon offers creators a way to host a “membership” model with multiple tiers, it still relies on third‑party hosting and can be less attractive for pure writing. Substack’s focus on newsletters positions it as a more specialised tool.
Medium: Medium’s partnership‑based model, which offers writers a flat fee, has been criticised for its lack of transparency and perceived editorial bias. Substack’s direct approach is seen as a response to those concerns.
LinkedIn: LinkedIn has been testing its own newsletter feature, with an emphasis on professional content. The Times piece points out that LinkedIn’s subscription model is a natural extension of its existing B2B services, but it still lags behind Substack’s sheer volume of content.
Traditional news apps: Some pay‑wall experiments, such as the New York Times’ “NYT+” and the Washington Post’s “PostPlus,” have seen limited success. Critics argue that those models still keep the revenue split in favour of the media house, whereas Substack flips that dynamic.

Risks, criticisms, and future outlook

No story of rapid growth is without its critics. Substack has faced accusations of encouraging “misinformation” by providing a platform with minimal editorial oversight. In 2022, the platform rolled out a “verified” badge for writers who undergo a vetting process, but critics argue that the system is too loose.

The Times article also notes concerns about sustainability. “What happens when a platform that relies on a 10 % cut faces a sudden drop in subscription rates?” asks one journalist quoted in the piece. Another point raised is the risk of concentration: as a handful of billionaires accumulate influence over the publishing ecosystem, questions about power distribution and public discourse are inevitable.

Looking forward, Substack’s next big move is likely to be an IPO or a larger strategic partnership. Its valuation of $5.8 billion, according to the Times’ reporting, makes it a compelling prospect for venture capitalists. However, the company faces the classic startup challenge: scaling the business while maintaining quality control and editorial integrity. If Substack can navigate those hurdles, it could reshape the entire media economy, pushing traditional outlets to either partner with or compete against the new platform.

Bottom line

Substack’s recent funding round—bolstered by Elon Musk, Jeff Bezos, Peter Thiel, and a handful of other heavyweight investors—underscores its status as a media disruptor. The platform’s business model, which rewards writers handsomely and places the audience in the driver’s seat, is a direct threat to traditional media’s subscription and advertising paradigms. While its competitors are scrambling to adapt, Substack’s future hinges on whether it can maintain editorial credibility, manage growth responsibly, and, perhaps most importantly, prove that a pure‑writer‑centric ecosystem can thrive in a crowded and increasingly competitive market. The Times’ in‑depth coverage reminds us that this is not just a tech story; it is a story about who owns the narrative—and how the economics of storytelling are changing faster than the words on the page.

Read the Full thetimes.com Article at:
[ https://www.thetimes.com/business-money/companies/article/substack-reels-in-star-investors-as-media-rivals-feel-the-pinch-llcxj8qvf ]