beehiiv: Solving Your Own Problems

Wil Chockley
WIl Chockley is a partner at 75 & Sunny, where he evaluates potential investment opportunities across sectors and works with founders to build their strategy and execute on their vision.

If you subscribe to a multitude of newsletters like I do, you may have noticed a little button that has started to pop up at the bottom of many of them (including this one).

In the last two years, Tyler Denk has led beehiiv (stylized with a lower-case b) on a torrid pace of growth, passing $4m of run rate revenue this spring, on pace to triple that by the end of the year. beehiiv has more than 35 million monthly unique readers and 7,500 active newsletters on the platform. Perhaps the most impressive piece of this, though, is that beehiiv did this having only raised $4m and having reached profitability before raising their $12.5m Series A led by Lightspeed Venture Partners.

Read on, as I’ll take you through Tyler’s journey from the suburbs of Baltimore to leading one of the buzziest startups in Los Angeles. 🐝

If you only have a minute to read, check out our key takeaways for founders and aspiring entrepreneurs.

  • 🤔 Solve your own problems - beehiiv was born out of Tyler’s experience at Morning Brew, where he was the founding engineer. Morning Brew readers constantly asked how they could make their own newsletters more like Morning Brew, and Tyler decided he could make that happen by building a standalone tech product.
  • 💸 Venture capital is a means not an end - Tyler has approached venture capital cautiously, raising only what he needs to build and accelerate growth. With this approach, beehiiv reached profitability raising less than $5m in venture capital and recently raised a Series A to accelerate growth.
  • 🤝 Strategic investors matter - beehiiv’s early investors included a number of newsletter writers and creators, like finance meme page Litquidity, who moved his 100k+ subscriber newsletter to beehiiv after investing and has promoted the platform to his followers and fellow creators.

🧒 Early Years

Growing up in Baltimore, Tyler Denk was a self described “normal suburban kid, not the smartest or anything,” but when I asked him how he started his entrepreneurial journey, his answer was immediate: physics class. As I think anyone who has gone through a high school physics class knows, physics is hard. For Tyler, though, that’s where he found his passion. He tore through the physics and engineering classes at his high school, and moved on to the University of Maryland, where he was a mechanical engineering major.

I loved everything about physics and equations and math and all that s*** - that's where I nerded out.

While nerding out in mechanical engineering, Tyler also joined all the entrepreneurial clubs, classes, and programs he could find. He met multitudes of people like him - aspiring software founders who might have had an idea but didn’t have the software engineering skills to build it. Unlike most of us (myself included), Tyler didn’t just talk about his ideas ad nauseum, but rather, he taught himself to code and built his first company himself (this is the first of many examples of Tyler solving his own problems).

The company was called Venture Storm, and the goal was to solve the “lack of coding skills” problem for everyone else by building a marketplace for founders with ideas and no technical skills with college-aged software engineers who have skills but no experience. Basically a cofounder dating app. Cool idea, but very hard to execute. Tyler worked on Venture Storm through college and after graduation, growth hacking, hustling, and pushing forward, but eventually wound the company down after realizing that he had a “terrible business model because we had the brokest customers possible, [new founders], who had zero willingness to pay us.”

🌎️ The Real World

After winding down Venture Storm in 2017, Tyler was a college grad with no job and a bunch of student loans to pay off, so he started freelancing for his grandfather’s shoe store, building the store its first online presence.

Tyler freelanced for a few months, building Shopify stores for small businesses in his network before sitting down with fellow Baltimorean Austin Rief, co-founder of the pioneering newsletter Morning Brew. Austin and the Morning Brew team were just getting started, and they needed an engineer to help them turn what was just a content company into something with a little more tech behind it. Tyler spent the next three years building the tech behind Morning Brew’s massively popular family of newsletters. Throughout those three years, Morning Brew readers who ran newsletters themselves would consistently contact the company asking about the Morning Brew’s tech stack as they looked to improve the appearance and functionality of their own newsletters. With this clear untapped demand, Tyler pitched the Morning Brew leadership team on licensing the company’s software to other newsletters, but pivoting a newsletter business to a SaaS business was judged a bridge too far.

Eventually, Tyler left Morning Brew in October 2020 to join Google just months before Insider acquired a majority stake in Morning Brew for $75m.

After leaving Morning Brew, Tyler couldn’t get the idea for a newsletter software company out of his head. Substack was flying high, but Tyler kept hearing about unsatisfied customers.

I kept seeing on Twitter and hearing from friends that people were complaining about the lack of features on Substack, and I knew I could build a better product because I had already built all of that at Morning Brew

Substack’s approach was to focus on simple newsletters written by individual authors, with a focus on monetizing via premium subscriptions. Mailchimp, the legacy leader, has always been a product built for email marketing rather than email newsletters. Neither platform was custom built for the aspiring newsletter company, and neither one was built for ad supported monetization, the bread and butter of Morning Brew’s business.

In the week between leaving Morning Brew and joining Google, Tyler and his Morning Brew colleague Ben Hargett scoped out what building a newsletter software company would look like. They thought it would take about 10 months to build while holding down real jobs at the same time. Ben brought along another friend and colleague Jake Hurd to help build out the product, and the three of them went to work (on nights and weekends).

🐝 beehiiv

In August 2021, Tyler, Ben and Jake were ready to go with their MVP and went to market for some initial funding to get the company off the ground, eventually raising a $2.6m seed round led by Social Leverage. Smartly, Tyler and team took not only money from institutional VCs, but also relevant creators, influencers, and newsletter writers like finance meme page Litquidity, who moved his 100k+ subscriber newsletter to beehiiv after investing and has promoted the platform to his followers and fellow creators.

Concurrent with the raise, the three co-founders left their day jobs and started working on beehiiv full time.

beehiiv has been in growth mode ever since. The company has grown ~40%+ month over month since its early days, with 90% of growth coming organically. One example of the clear product/market fit of the business is that in year one, the company didn’t spend a penny on paid customer acquisition. Since then, the company has grown to over $4m in run rate revenue, and is on pace to triple by the end of the year.

So why has beehiiv been such a hit with newsletter writers? 🤔

Substack has been around longer, Mailchimp and Constant Contact even longer than that. All have bigger warchests, bigger engineering teams, and bigger marketing budgets.

What beehiiv has is an extremely clear understanding of the customer. In Tyler’s opinion, Mailchimp, Constant Contact, and the other legacy players are purpose built for email marketers not newsletter writers. The platforms are massively full featured but are clunky and confusing for first time users. They don’t offer easy, simple website tooling and are more expensive than beehiiv and Substack. Substack, on the other hand, is free but offers extremely limited customizability both on the newsletter and on websites. If you see a Substack newsletter, you immediately know it’s from Substack. It’s hard to stand out, and for enterprises, it can look unprofessional. They also have limited growth-focused features, like referral programs.

Additionally, Substack has focused on paid subscription-based monetization rather than sponsor-based monetization, dramatically reducing its appeal to free, ad-supported newsletters. Clearly Tyler and beehiiv onto something, given the rapid growth of the business thus far.

Today, beehiiv makes money primarily by charging a SaaS fee to writers, with tiers ranging from free to $99 a month for the premium package, but the company’s grand ambitions lie elsewhere, in advertising.

Today, if you’re an internet marketer, there are two primary mega-channels that exist - Google for search and display ads and Meta for social media. Tyler wants to build a third mega-channel - newsletters. Right now, if you want to market your product or service through a newsletter, you have to find a newsletter, manually work with them to create a custom contract, and then go from there. Similarly, if you’re a newsletter writer, a large portion of your time is probably spent trying to sell ads on your product. beehiiv hopes to create the first true marketplace for newsletter advertising, unlocking supply and demand for both sides of the equation.

Obviously, that’s a big vision, which would take years to accomplish, but it’s a goal that has gotten top-tier investors, like Series A lead Lightspeed Venture Partners, as well as others excited about the opportunity.

We here at dot.LA are excited to see what Tyler and the beehiiv team can accomplish, and we’re happy that they picked sunny Los Angeles as their home base.

P.S. If you write your own newsletter, you can sign up for beehiiv here

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🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Image Source: Disney

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

  • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
  • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
  • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
  • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
  • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
  • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
  • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
  • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
  • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Image Source: Anduril

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

CB Insights

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

🚀 SpaceX gears up for another stellar year, active raises, and more

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Happy Friday Los Angeles! You made it through the first week of 2024!

🔦 Spotlight

Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

Image Source: SpaceX webcast

What happened with SpaceX in 2023?

  • Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
  • SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
  • SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
  • Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
  • Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

Here is some of what is to come in 2024:

🤝 Venture Deals

Just Announced

Check back next week!

LA Exits

  • CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
  • McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

📅 LA Tech Calendar

Sunday, January 7th

Wednesday, January 10th

  • Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
  • Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

📙 What We’re Reading

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