I struggle to make the VC math work on Substack. They take a 10% cut on paid subscriptions. They need 1 billion in paid subscriptions to have a $100m revenue, which at a hopefully 30% ebit would put them in the $0.5-1 billion evaluation (maybe). Now, at an average of $200 of paid subscribtions, it would take 5m paid users to achieve a 1 billion revenue.
If we assume a very generous paid / non paid user ratio of 10%, it means Substack needs 50m total users to have 5m paid users.
You tell me, that with 50m users, Substack would be content to make “only” $100m per year?
If we assume a very generous paid / non paid user ratio of 10%, it means Substack needs 50m total users to have 5m paid users.
You tell me, that with 50m users, Substack would be content to make “only” $100m per year?