As the number of email users worldwide approaches 5 billion, newsletters delivered directly to inboxes continue to be a compelling way to capture attention and disseminate information. Recognizing this trend, beehiiv, a New York-based startup that has developed a platform for creating and distributing newsletters, has recently announced a funding round of $33 million. This investment, led by NEA and joined by Sapphire Sport and Lightspeed Venture Partners, will fuel the company’s expansion and enhance the platform’s capabilities. Notably, beehiiv does not disclose its valuation with this round but has now raised a total of $46.5 million. This funding comes on the heels of significant growth for beehiiv. In June 2023, when the company secured its $12.5 million Series A funding round led by Lightspeed, beehiiv had 7,500 active newsletters with 35 million unique readers and 350 million monthly impressions. Today, the company sends out 1 billion emails per month from approximately 20,000 active newsletters. While the number of unique readers is not disclosed, it has undoubtedly increased alongside the overall growth. Newsletter users include both individual writers and brands, including Arnold Schwarzenegger, as well as larger organizations such as Boston Globe Media and Brex. Despite the already extensive reach, beehiiv aims to expand its user base further. Over the past year, beehiiv has also established an advertising network that complements its range of pricing tiers based on different features and functionalities. The company reports that its customers collectively generate approximately $1.2 million in monthly revenue through its platform. CEO and co-founder Tyler Denk highlights the advertising network as a “holy grail” for advertisers due to its ability to connect specific campaigns with highly relevant niche audiences. Denk also emphasizes the potential for newsletters to monetize through advertising, similar to Netflix’s sponsorship model. The digital advertising industry relies on economies of scale, and beehiiv intends to invest in marketing initiatives and forge partnerships with larger publishers to increase its inventory. Denk acknowledges the challenges of differentiation in a crowded market but believes that beehiiv’s focus on simplified customer migration and integration with external tools will set it apart. The company also intends to adapt to evolving consumer preferences. While beehiiv has primarily focused on publishers and content creation up to this point, Denk does not rule out exploring marketing emails in the future. beehiiv faces competition from various players, including Substack, Ghost, Buttondown, HubSpot, and MailChimp. However, the company aims to differentiate itself by providing seamless customer migration and integration with preferred tools. The ongoing challenges faced by publishers in the digital landscape, including algorithm changes, declining traffic from Facebook, and the shift towards visual platforms like TikTok and Instagram, present opportunities for newsletters and companies like beehiiv. Nevertheless, the risk of “peak” popularity remains, applicable to both traditional and viral platforms. Despite these uncertainties, investors remain optimistic about beehiiv’s potential. Danielle Lay, Partner at NEA, believes that email remains a powerful digital channel with untapped potential for publishers to grow and monetize their audiences. She expresses confidence in beehiiv’s leadership and customer-centric approach and anticipates the company’s success in establishing itself as the leading email platform for creators and advertisers alike.
beehiiv Raises $33 Million to Expand Newsletter Platform Amid Surging Email Usage
