Hamish McKenzie, the Kiwi co-founder of Substack. Photo / New York Times
Substack, the new media company co-founded by New Zealander Hamish McKenzie, has hit business press headlines in the United States today by raising US$100 million ($168m) at a US$1.1 billion ($1.8b) valuation.
McKenzie, a former freelance writer for the Listener and Otago University graduate who now lives in San Francisco with his wife and two children, created Substack with Canadian Chris Best and Japan-born Jairaj Sethi.
The firm offers a newsletter platform that lets content creators – including NZ sports journalist Dylan Cleaver, documentary maker David Farrier and Wellington business writer Bernard Hickey – charge for their content, direct to readers.
Substack takes a 10% cut of whatever a creator charges for a monthly subscription.
Professional athletes and authors like Salman Rushdie and Margaret Atwood are among hundreds of thousands of creators using Substack.
The round was led by Bond, the US venture capital company that recently backed another New Zealand-founded start-up, smart cow collar firm Halter, as it recently raised US$100m at a US$1b valuation.
Rich Paul, the founder of Klutch Sports Group and powerhouse Silicon Valley venture capital firm Andreessen Horowitz were also onboard.
There was also a lone New Zealand investor: Auckland-based Icehouse Ventures, which chipped in $5 million from its Growth Fund II.
“Who would have guessed 10 years ago that a Kiwi founder would build a billion-dollar company in the media of all places?” Icehouse Ventures partner Jo Wickham said.
“In the last month we have seen Kiwi-founded companies become unicorns in cow collars and direct content. There is no through line between these ideas, but there is between the scrappy, visionary people behind them.
“At a time when audiences, content creators, and publishers have been grappling with a transforming media industry, Substack has been at the bleeding edge of this change.
“We’re not far from a future when all of the most important stories in the world play out first on Substack,” Wickham said.
Herald Media Insider columnist Shayne Currie recently recounted how the Central Otago boy who attended Otago University, became the editor of student magazine Critic, chipped away as a freelancer for various publications before heading overseas (Canada, Hong Kong and the US) to eventually become a key figure in Silicon Valley.
Along the way, McKenzie has worked for Elon Musk (as a writer), wrote a book about Tesla, and worked at tech news site PandoDaily and messaging app Kik.
It was at Kik that he met Best and Sehi. The trio founded Substack in 2017.
In March, Substack said there were five million people paying for its content, up from two million in 2023.
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The founders’ shareholdings have not been made public, but would have been diluted by earlier Series A and Series B funding rounds, which each brought a raft of new shareholders onboard.
In 2023, Substack found itself in the middle of the culture wars, as several far-right commentators took refuge on its platform after being exiled from Facebook and other social media (which have since liberalised their content policies).
McKenzie said in a statement to Media Insider at the time: “Substack is a platform that is built on freedom of expression, and helping writers publish what they want to write.
“Some of that writing is going to be objectionable or offensive. Substack has a content moderation policy that protects against extremes – like incitements to violence – but we do not subjectively censor writers outside of those policies.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.