Creative Cash Flow

Substack Swaps Series C for Crowdfunding, Torch Ignites Consumer Startups With Dual Funds, and a Startup Looks to Spice Up Gig Work Incentives.

Author

Adam from VC Brags
March 30, 2023

Welcome Shareholders,

In this daily edition of the Brags Newsletter, we'll cover Substack's fundraising adventures, Torch Capital looks to fuel the fire in the consumer startup ecosystem with a pair of new funds, and Salt Labs raises money to incentivise gig workers.

So sit back, grab a snack, and enjoy!

Venture Today 👏

  • Venture-backed subscription media platform Substack has pivoted to crowdfunding to extend its runway after failing to raise a Series C last year.

Substack said it is generating revenues of $20 million annually and is looking to raise money at the same valuation as its Series B in 2021. Back then, the company raised $65 million at a $655 million post money valuation. The company tried raising money from VCs last year to extend its runway but failed to attract prominent investors. Substack said that writers on the platform and anyone else interested could invest starting at $100.

As of today, the company has raised $6.52 million from 5,628 investors (exceeding the crowdfunding cap on investments). The company disclosed that over $300 million had been paid to writers via Substack, which now boasts 35 million active subscriptions, including two million paid ones. With over 17,000 writers earning on the platform, the top 10 publishers collectively generate over $25 million annually.

Who's Raising?

  • NYC Based early-stage Venture Firm Torch Capital is raising $200 million across a pair of new funds targeting consumer startups.  

Torch Capital, founded in 2018, has raised $116 million for its second flagship fund and $89 million for its first opportunity fund. The capital raised for the new flagship fund is a significant step up compared to the first fund, which raised $60 million. With the new funds, Torch wants to double down on backing solopreneurs, including creators, independent contractors, freelancers, and others starting small businesses.

So far, Torch has invested in companies like SMB banking platforms Rho and Lili, which focus on SMB clients and Gig Workers. The venture firm has already begun investing with its second fund, backing 11 companies, including Embed, a clearing custody platform for brokerages and Mental Health Provider Little Order. Torch plans to invest in 30 startups with the new fund in total, with cheque sizes varying between $1 and $3 million for seed startups and $5 million for Series A startups.

Startup of the Day

  • Salt Labs, which looks to incentivize gig workers through its rewards platform, has just raised $10 million in pre-seed funding led by Fin Capital, with participation from Anthem Venture Partners and others.

The company said that it plans to use the new funding to build out its initial team and develop its product and its go-to-market strategy. Salt, set to launch in early spring for all workers, aims to gamify employment by offering rewards for each hour worked.

The company likens its rewards to a frequent flier program, where workers accumulate a virtual currency called Salt, similar to earning miles for flying. Salt can be redeemed for goods and experiences, or transferred to family and friends. Over the long term, the company wants to introduce a "vesting" feature that enables workers to earn extra rewards for extended periods of employment at a particular job.

Fresh Finds

  • Stigg is a pricing and packaging API for SaaS, simplifying the creation and management of pricing plans and buyer experiences.

  • Stigg Offers API & SDKs, snap-in widgets for faster development, and native billing integration with easy setup and maintenance.

  • Stigg supports webhook automation for various tasks and is designed for speed, scale, and compliance, ensuring optimal customer experiences.

Memes and Other Things

The Headlines

How Was Today's Newsletter?

Give us your honest opinion. We really don't mind.