With nearly 5 billion people using email worldwide, newsletters regularly delivered to people’s inboxes still seem like a difficult way to get attention for what you’re writing. As a sign of the medium’s popularity, one of the startups that is building a platform for the creation and distribution of newsletters is now announcing funding. New York-based startup beehiiv has raised $33 million, which it will use to expand its business and the technical capabilities of its platform.
NEA is leading this round, which also includes Sapphire Sport and previous backer Lightspeed Venture Partners. The startup is not disclosing its valuation for this round, but has now raised $46.5 million.
The money comes after significant growth. When we reported on beehiiv’s $12.5 million Series A in June 2023 (a round led by Lightspeed), the company had 7,500 active newsletters with 35 million unique readers and 350 million monthly impressions. The company now sends 1 billion emails per month from around 20,000 active newsletters (the number of unique readers was not disclosed, although that number has undoubtedly increased as well). Newsletter users include both individual authors (plus individual “brands”: Arnold Schwarzenegger is one of his customers) as well as larger organizations such as Boston Globe Media and Brex.
That sounds like a lot of newsletters, but beehiiv is looking for more. Over the past year, the startup has also built and launched an advertising network alongside a range of pricing tiers based on different features and functionality. (The company says its customers collectively generate around $1.2 million in revenue on its platform in an average month.)
CEO and co-founder Tyler Denk described the advertising network he launched as a “holy grail” for advertisers because it can connect specific campaigns to niche audiences who may be best attuned to seeing and responding to them. “It also means that these newsletters can now make money from ads like Netflix that they sponsor,” he added.
Niche or not, digital advertising business models rely on economies of scale. Therefore, the focus will be on investing in more marketing and striking deals with larger publishers to bring more inventory into the mix.
“We’ve only been around for two years and have sent a billion emails,” said Denk, referring to the time between the founding in October 2021 and now as “from zero to one.”
“That is of course the most difficult thing. Now that we have scale, we look for network effects,” he said.
Denk and co-founders Benjamin Hargett and Jacob Hurd have all previously worked together at Morning Brew – a publisher that has truly pushed the envelope in the use of newsletters – and this background has led beehiiv to focus primarily on publishing and “content” to date. has concentrated. However, when asked if and when beehiiv would ever consider expanding the other part of the newsletter business – its focus on marketing emails – Denk wouldn’t rule it out over time. “Email is email,” he said
The company is not without a wide range of competitors. In addition to Substack – arguably the startup that brought newsletters back into the conversation when it started to explode a few years ago – there are open source competitors like Ghost, which announced earlier this month that it would support ActivityPub to allow for tighter integration reach with other social platforms that use the “fediverse” format and buttondown, as well as with services such as HubSpot and MailChimp, which come from a strong DNA in email marketing, among others.
Denk noted that one of the ways beehiiv wants to make a name for itself is by making it easier for customers to migrate to its platform and use it via an API alongside the CRM or other tools they prefer. Whether that’s enough to differentiate the company in a very crowded pool is a challenge.
The other will be to measure and adapt to consumer tastes. Right now, publishers are wringing their hands as they consider how their jobs will become more difficult in many ways.
They struggle with the whims of Google and its algorithms; the decline of Facebook as a traffic driver; the major shift from online reading to the emergence of apps like TikTok and Instagram and their highly visual formats; and what it all means for your advertising and traffic. Some will consider paywalls, others will not. All of this means that right now could be a prime opportunity for newsletters and companies like beehiiv to really get started. But “Peak” – anything is a real risk and can apply to established media as well as viral platforms these days.
Investors still believe that despite these many what-ifs, there are still big opportunities for bees.
“Email is one of the most enduring digital channels, but there is immense untapped potential for publishers to grow and monetize newsletter audiences,” Danielle Lay, partner at NEA, said in a statement. “We believe Tyler and his team are pioneers in the field and true customer-focused builders. We are excited to work with them to establish beehiiv as the leading email platform for developers and advertisers alike.”