The news: Newsletter and digital publishing startup Substack has abandoned plans to raise a Series C funding round due to the souring market, per The New York Times—a sign that hype around the company that skyrocketed during the pandemic may be cooling.
How we got here: Substack was heralded during the pandemic as a new model for digital publishing, but current economic uncertainty and the recent interest rate increase has dampened investor enthusiasm.
- Rising interest rates have made many companies hesitant to spend aggressively. Several tech companies have announced hiring freezes or waves of layoffs, and major venture capital firms like Sequoia Capital have urged startups to cut back on spending.
- Substack’s last funding round was announced in March 2021 and valued the company at $650 million. The canceled series C would have valued the company as high as $1 billion, according to the Times’ report.