Substack says it could be profitable — but it still isn’t

Substack still isn’t profitable despite attracting big names in the independent writer world, whose newsletters and blogs rake in a massive digital subscriber base for the platform. Hamish McKenzie, one of Substack’s founders, told The New York Times that it could choose to be profitable but is focusing instead on “investing in and continuing to grow the business.”

According to the Times, X owner Elon Musk offered to acquire Substack during a phone call with its CEO, Chris Best, in April 2023. Musk even reportedly suggested making Best “chief executive of the combined company,” but Best turned down the offer.

Substack has repeated the line that it could choose profitability if it wanted for years. Best said on Nilay Patel’s Decoder in 2020 that the company could become profitable “quickly” if its expenses didn’t grow. But its “focus has always been on being very comfortably default alive” — that is, growing and gathering investments. He also said, “…unless you can raise money, the company is going to end.”

The Times details several recent moves the company has made to grow its business and shore up funds. Those include raising money from its writers (something Axios reports it recently did again), starting its own Twitter competitor, Notes, and betting on political content, which has done well on the platform. The Times writes that Mehdi Hasan’s Substack-hosted political outlet Zeteo is ranked fifth on the politics leaderboard, “generating about $3.9 million” annually.