Beehiiv attracts $32M to make its newsletter publishing platform more sticky | TechCrunch

With the number of people using e-mail globally approaching 5 billion, having newsletters sent regularly to people’s inboxes seems like a sticky way to draw attention to whatever you’re writing. Now, in a sign of the medium’s popularity, one of the startups building a platform to create and distribute newsletters is announcing some funding. New York based startup beehiv has raised $33 million, which it will use to expand its business as well as the technical capabilities of its platform.

NEA is participating in this round along with Sapphire Sports and previous backer Lightspeed Venture Partners. The startup is not disclosing its valuation in this round but it has now raised $46.5 million.

The money is coming after some significant growth. When we covered the beehives $12.5 million Series A In June 2023 (in a round led by Lightspeed), the company had 7,500 active newsletters with 35 million unique readers and 350 million monthly impressions. Now, the company is sending 1 billion emails per month from about 20,000 active newsletters (it hasn’t disclosed the number of unique readers, though that figure will undoubtedly have increased). Newsletter users include individual writers (as well as personal “brands”: Arnold Schwarzenegger is among its subscribers) as well as large organizations such as Boston Globe Media and Brex.

That seems like a lot of newsletters, but The Beehive is looking for more. In the past year, the startup also created and launched an ad network that sits alongside a Range of pricing tiers Based on different features and functionalities. (The company claims that in an average month its customers collectively generate about $1.2 million in monthly revenue on its platform.)

CEO and co-founder Tyler Denk has described the ad network as the “holy grail” for advertisers because of how it can connect specific campaigns to the specific audiences who may be most inclined to see and respond to them. . “It also means that these newsletters can now monetize through advertising, such as those sponsored by Netflix,” he added.

Niche or not, digital advertising business models are based on economies of scale, and so the focus will be on investing in more marketing and signing deals with larger publishers to bring more inventory into the mix.

“We’re only two years into this and we have a billion emails going,” Denk said, referring to the period between being founded in October 2021 and now “going from zero to one.”

“Obviously, this is the hardest thing to do. Now that we have scale, we’re looking for network effects,” he said.

Denk and co-founders Benjamin Hargett and Jacob Hurd all previously worked together at Morning Brew — a publisher that really emphasized leveraging newsletters — and that background has so far focused primarily on publishers and “content.” Inspired to concentrate. However, when asked if and when Beehive would consider building out another part of the newsletter business – focusing on marketing emails – Denk did not rule out the possibility over time. “Email is email,” he said

The company is not devoid of a huge range of competitors. In addition to Substack – arguably the startup that brought newsletters back into the limelight when it started making waves a few years ago – there are also open source competitors like Ghost, which earlier this month It said it will also begin supporting ActivityPub to more closely integrate with other social platforms using the “Fediverse” format and buttondown, with HubSpot and Mailchimp coming from strong DNA in the field of email marketing. Will also provide many other services like.

Denk said one way Beehive hopes to make its mark is by making it easier for customers to migrate to its platform, and through APIs, with whatever CRM or other tools they prefer to use. To use it together. Whether this will be enough to differentiate the business in a very crowded pool remains a challenge.

The second would be to measure and match consumers’ tastes. Right now, publishers are rubbing their hands as they consider the many ways their job is becoming harder.

They are battling the whims of Google and its algorithms; The decline of Facebook as a traffic engine; The drastic change from reading on the internet to the rise of apps like TikTok and Instagram and their highly visual formats; And what impact all this has on their advertising and traffic. Some will consider paywalls, some will not. This means there could be a major window of opportunity right now for newsletters, and for companies like Beehive. But anything “extreme” is a real risk, and these days that can apply to tried-and-true mediums as much as it applies to viral platforms.

Investors still believe that despite so many ‘what-ifs’, there are still huge opportunities for investors.

“Email is one of the most enduring digital channels, but there is immense potential for publishers to grow newsletter audiences and monetize,” Danielle Ley, NEA partner, said in a statement. “We believe that Tyler and his team are leaders in the field and true customer-focused builders. “We are thrilled to partner with them to establish Beehive as the leading email platform for creators and advertisers.”