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

With the number of people using e-mail globally approaching 5 billion, newsletters delivered regularly into people’s inboxes continue to look like a sticky way of getting attention for whatever it is that you’re writing. Now, in a signal of the popularity of the medium, one of the startups building a platform for creating and distributing […]

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beehiiv, a newsletter platform, gets $12.5M in its inbox

The world took a double take at the potential of newsletters after Substack started to blow up a few years ago. Now, another buzzy startup wants to disrupt the disruptor. beehiiv, a(nother) platform for writing, monetizing and distributing newsletters, is today announcing that it has raised $12.5 million, a Series A that it will be using to expand its product, bring on more writers and build out its revenues.

Lightspeed Venture Partners is leading this round with Social Leverage, Creator Ventures, Blue Wire Capital, and Contrarian Thinking Capital also participating.

The premise of beehiiv (styled with a lower “b”) is pretty simple: Tyler Denk, the co-founder and CEO, believes that while social media is where writers and other creators may have made their names, email — with its estimated 4.4 billion users overall — remains the most lucrative channel for communicating and building more audience. And putting aside the fact that some of us have inboxes overrun with too much junk, email gives us the tools for more curation, where newsletters can thrive.

So, even with a crowded (and growing) field of existing newsletter services that includes not just traditional players like Mailchimp and newer juggernauts like Substack, there is still a big opportunity in coming up with innovative approaches to do just that, through advertising, paywalls and more.

“It’s very early days for what is a massive opportunity,” Denk told me this week.

Part of his confidence comes from experience. He started the company with Benjamin Hargett and Jake Hurd (pictured above, L to R), and the three initially cut their teeth at Morning Brew, building what else? The media company’s very successful newsletter business.

NYC-based beehiiv was launched in October 2021, and since then, on some $4 million of prior funding, it’s amassed a network of 7,500 active newsletters whose newsletters collectively have 35 million unique readers and see 350 million monthly impressions. It currently has a revenue run rate of $4 million, with ARR of $3 million, based on monthly fees that it charges its customers (it has three usage tiers currently: free, $42/month, and $84/month). It was profitable on a monthly basis from April 2023 (this latest funding has changed that now).

For some comparison, beehiiv’s most obvious rival, Substack, says it has 35 million ‘active’ subscribers, which includes 2 million paid subscriptions. The latter is the focus of Substack’s newsletter business model: it takes a 10% cut on those subscription revenues. To bring on more of the kind of writers who might lure paid subs, Substack has paid advances to writers and even turned that concept into a product. While Substack remains best known for its newsletters and some of the high-profile writers and writing published on the network, it’s also spun up podcasts, something that looks like a Twitter competitor, and more.

beehiiv is taking a different approach, at least for now. Its focus for the moment continues to be newsletters, rather than other kinds of media formats — although Denk doesn’t rule out newsletters that might, down the road, contain a lot more than just text in them. It won’t be paying any advances to writers. “I don’t see that as sustainable,” Denk simply said when I brought it up.

And it has no plans to take a cut on subscriptions if creators do want to create paywalls. (Stripe fees still apply.) In fact, user growth on the platform, both in terms of its writers as well as those writers’ audiences, is “primarily product and community led” Denk said. “We didn’t spend a dollar on acquisition for the first 12 months.” Even now he said that around 90% of its monthly growth remains unpaid.

It has a mix today of large newsletter publishers that have grown from the ground up on beehiiv, such as crypto-focused Milk Road and a cluster of AI-focused newsletters. Others have swarmed to beehiiv from other platforms porting their audiences along. Those include Matthew Berry’s Fantasy Life and Daily Drop.

Its big plans are in areas like advertising, and building what its investors Nicole Quinn and Faraz Fatemi (respectively general partner and partner at Lightspeed) described to me as a programmatic ad network for newsletters.

This is just getting started, Denk tells me. Its nascent efforts launched just six months ago and are currently giving beehiiv a take rate of about $50k/month and growing.

Today, ad content is supplied by advertisers, but down the road Denk said that beehiiv is working on a way of better matching brands and advertisers to newsletter topics, and offering a widening array of formats to insert ads natively, even leveraging AI to learn the “voice” of different authors to tailor content and create more seamless experiences for readers.

There are obvious drawbacks in the world of newsletters, even apart from heavy competition in the market.

Although a number of interesting newsletters have sprung up as alternatives and complements to newspapers, magazines, blogs, podcasts and other online content formats, the mainstay of the format remains marketing-led: updates from e-commerce sites and other businesses that get sent to users, unsolicited emails (even these days) that can be hard to unsubscribe from. Switching a large base of consumers over to thinking about newsletters as more than this has yet to be achieved.

Another challenge is that even in the world of “quality” newsletters, they run the risk of overrunning themselves. When incisive commentary about world affairs, business world updates, managing life as a working mom, culinary anecdotes about expat life in Paris, tips on books to read, book reviews, tech insights, celeb gossip, arty gossip, and so on and so on all become too numerous and the novelty wears off, will people still open all those newsletter emails? And given how many of them are one-man-bands, will writers always have enough gas in the tank to write them as regularly?

And there is the question of how to sustain an email-based audience: younger generations already use email significantly less than older ones. Will newsletter content spur a new stream of usage of email, or will the decline of email eventually kill off newsletters?

All of this actually also posed challenges for beehiiv, which faced all this pushback and more when it was first went to talk to would-be investors, Denk said.

“When we initially tried to raise money, Substack was already dominant, but also Twitter had just acquired Revue and Facebook had launched Bulletin,” he recalled, all things investors brought up in meetings. But fast forward to today, the latter two social platforms’ efforts have both totally fizzled out. “The juice was not worth the squeeze,” Denk said. Yes, Substack and the many others remain, but beehiiv has grown anyway, on far less funding.

Now, it seems that the staying power of beehiiv, and of newsletters, and that of email currently, are compelling enough for investors like Lightspeed to take the bet.

“Social networks present a feed but the email inbox gives users a deeper level of control over the content,” Fatemi said. “What email offers is more privacy and control.” (That’s before adtech might take a more prominent role…)

beehiiv specifically, he said, had three key attributes that got Lightspeed interested: the platform that the startup had already built; the numbers and growth around its SaaS and other monetization plans; and the “domain experts” building the product.

“The three founders and their team understand the challenges of the email space because of their Morning Brew days,” he added.

Updated with “beehiiv” styling, and to clarify to the profitability time frame, 7,500 active newsletters, and take rate on ads.

beehiiv, a newsletter platform, gets $12.5M in its inbox by Ingrid Lunden originally published on TechCrunch

Substack targets Twitter with launch of discussions feature, Substack Chat

Another company hoping to capitalize on Twitter’s upheaval in the wake of Elon Musk’s takeover is the newsletter platform Substack. The company has openly targeted Twitter’s user base over the past few days and has now thrown its hat into the ring as a more direct competitor with the launch of Substack Chat. The new feature allows Substack writers to communicate directly with their most avid and loyal readers right in the Substack mobile app.

With Chat, Substack is not only taking on Twitter, where many back-and-forth threaded discussions between writers and readers already take place, but also other online communities where writers have been building out networks of their own, like Discord, Slack and Telegram.

The company says the new Chat feature will eliminate the need for its writers to “frankenstein together different software tools and cross-reference subscriber lists,” it explains in its announcement.

Image Credits: Substack

Chat is not a Twitter clone by any means — though there is overlap with how writers have used Twitter in the past.

For starters, the Chat feature will be opt-in, meaning not every newsletter may have chats enabled at this time. Publications will have to first enable the feature on their Settings page or by simply starting a new thread in the Substack app for iOS. Already, Substack says writers including sports journalist Joe Posnanski, pop culture writer Hunter Harris, and comics writers 3 Worlds / 3 Moons have launched chats on the service.

In some cases, these chats have been used to discuss live events — like Game 3 of the World Series — or they’ve been used in place of email or other ways writers may have chosen to interact with their readers in the past. Readers can react to posts using emojis and add their own comments in the chat threads.

The feature could benefit those who spend a lot of time reading on Substack or those who want to more closely network with fellow creators or readers. However, it isn’t really a direct replacement for tweeting more publicly as it lacks Twitter’s reach.

Plus, the user interface is designed more like a traditional chat app — not a timeline you scroll.

Still, the launch could relocate some of the discussions that would have normally taken place on Twitter to a more private networking space. Combined with the ongoing exodus to alternative social networks like Mastodon, and later perhaps, Bluesky, Twitter may lose access to some of the conversations that it would have otherwise hosted.

Image Credits: Substack

 

Chat’s launch isn’t the only way Substack has attempted to capitalize on the Twitter chaos in recent days. It also took a more direct shot at Twitter, when it warned in a post on Oct. 31 that “Twitter is changing, and it’s tough to predict what might be next.” The post had encouraged creators of all sorts to port their Twitter follower base to Substack, given the current uncertainty around Twitter’s future.

The launch of Chat arrives at a time when there’s been a broader shift to more personal and private social networks, which we’ve seen with the rise of friends-only apps like BeReal as well as the launch of private discussion groups on WhatsApp, called Communities.

Substack Chat also reflects Substack’s larger goal of becoming a more private social network itself. The company alludes to its plan, writing in its post that “these are just the early days for Chat and all of Substack’s social features,” and adding there’s “more to come” in the future.

Given the company’s propensity to host controversial writers and the otherwise deplatformed, however, this direction could see it wading even deeper into the culture wars surrounding what constitutes free speech — an area Musk’s Twitter is also having to grapple with. The more Substack associates its brand with the more extreme personal brands of divisive media personalities, the less it will be able to attract the larger (and typically more moderate) readers that constitute the majority of any network’s user base. That could limit Substack’s ability to go mainstream, no matter how clever its social features may be.

Substack Chat is only available in the Substack iOS app at launch but will come to Android soon, the company says.

Substack targets Twitter with launch of discussions feature, Substack Chat by Sarah Perez originally published on TechCrunch

Apple says, ‘NFTs? Yes, fees’

Image Credits: TechCrunch

Welcome back to Chain Reaction.

Last week, we recorded our news episode live onstage at TechCrunch Disrupt, in which we talked about the Aptos launch and shared our predictions for where we expect money to flow in the web3 world. This week, we dove into NFTs, examining Apple’s new App Store guidelines and Reddit’s recent success in the space.

We also announced some personal news — one of our co-hosts, Lucas Matney, has moved on to new adventures outside of TechCrunch, but Jacquelyn and Anita are still here and excited to keep bringing you the latest and greatest crypto stories each week.

We’re also super busy prepping for our crypto event in Miami this November 17th, where we’ll be onstage chatting with speakers including OpenSea’s Devin Finzer, FTX’s Amy Wu and Yuga Labs’ Nicole Muniz. If you’re interested in joining us, you can use the promo code REACT for 15% off a General Admission ticket.

Do you want Chain Reaction in your inbox every Thursday? Sign up here: techcrunch.com/newsletters.

this week in web3

Here are some of the biggest crypto stories TechCrunch has covered this week.

Singapore may soon require retail investors to take test before trading crypto, prohibit credit cards

The country may soon require retail investors to take a test and not use credit card payments and other forms of borrowing for trading cryptocurrencies, per a central bank proposal on Wednesday. It’s another stringent measure from the island nation’s government as it looks to make citizens aware of the risks surrounding volatile assets.

Asset management firm Stone Ridge launches Bitcoin-focused accelerator program

Asset management firm Stone Ridge has launched a startup accelerator, In Wolf’s Clothing (Wolf), that will be dedicated to growing Bitcoin-focused applications, the team exclusively told TechCrunch. The program will bring four cohorts per year, each consisting of about eight to 12 teams, or about 30 to 50 founders, to New York City from around the world for eight weeks at a time to focus on building on the Bitcoin-centric Lightning Network and Taro protocol, Kelly Brewster, CEO of Wolf, told TechCrunch.

Apple cracks down on NFT functionality, social post boosts with App Store rules

Apple introduced new App Store rules on Monday that limit features unlocked through NFTs. The company is prohibiting apps to use other mechanisms such as QR codes or cryptocurrencies to give special access to users. It’s also cracking down on cryptocurrency exchanges as it now mandates them to have “appropriate licensing and permissions to provide a cryptocurrency exchange” in all regions they operate in.

Meta posts another revenue decline as investors voice metaverse concerns 

Meta reported earnings this week, revealing that its net income was just $4.395 billion, down from $9.194 billion year over year. The decline is mostly due to Meta’s huge investment in the metaverse: Reality Labs, Meta’s virtual reality division, lost $3.672 billion this quarter.

Mark Zuckerberg avatar from Meta Connect 2022

Image Credits: Meta

the latest pod

For this week’s Tuesday episode, we caught up with Andrei Brasoveanu, a venture capital investor at Accel, about his web3 investments. He talked to us about his investments in companies such as Nansen and Sorare and discussed how the firm competes with crypto-native VC players for top deals in the blockchain space. 

In our Thursday episode, we unpacked two big stories in the NFT space — Apple’s new App Store guidelines for NFT purchases, which are less-than-friendly to exchanges, and Reddit’s surprisingly successful foray into this undeniably tough market. We also talked about the latest tea from across the pond in the U.K., where crypto proponent Rishi Sunak just became prime minister, and what that could mean for crypto companies and regulation in the country.

Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Overcast and Spotify to keep up with the action.

Rishi Sunak, UK Chancellor

Image Credits: HM Treasury

follow the money

  1. DAO operating system Origami raised $6.2 million from investors, including Bloomberg Beta and Protocol Labs.
  2. NFT startup Exclusible bagged $5 million from FC Basel owner Dan Holzmann and Tioga Capital.
  3. ParaFi participated in Thala Labs’ $6 million seed round to build a DeFi stack on Aptos.
  4. Paragraph, a web3-native publishing platform, closed a $1.7 million pre-seed round led by Lemniscap with participation from Binance Labs, FTX Ventures and others.
  5. Blockchain identity and privacy startup Sealance emerged from stealth with an undisclosed amount of funding from Galaxy, Ribbit Capital and other investors.

This list was compiled with information from Messari as well as TechCrunch’s own reporting.

Apple says, ‘NFTs? Yes, fees’ by Anita Ramaswamy originally published on TechCrunch

Venture investors to founders: Turn down for what?

Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.

Gumroad’s Sahil Lavingia broke into the venture world as one of the early testers of the rolling fund, an AngelList product that allows investors to raise capital on a subscription-like basis. That was in 2020. Fast-forward to 2022 and a lot has changed.

One of those changes? The number of pitches from founders looking to raise. “Since March, it’s gone down about 90%,” Lavingia told TechCrunch. “I was probably seeing more than most — about 20 to 40 well-vetted decks a week – and that number is down to about two to four a week now.” He’s also seen the quality of talent rise for people wanting to work for Gumroad — which he partially attributes to the steady stampede of layoffs — and a decline of founders starting companies.

A downturn in the number of founders raising capital suggests that early-stage startups aren’t as immune to macroeconomic shifts as some investors claim; in contrast, a boom of fresh startups would support the idea that recessions — and the accompanying spate of layoffs — are the time when startups are born.

Lavingia breaks down the state of founders into three buckets: “tourist founders, immigrant founders and ‘born and raised’ founders.” Tourist founders, he said, are the ones who only start companies in bull markets, a cohort he said has dropped by about 100%.

“They’re rarely fundable in bear markets,” Lavingia said. “They need to hire others to build stuff.” Immigrant founders, meanwhile, care less about the reputation and status of starting a company but do weigh its risk and return. This founder cohort has been cut in half, per Lavingia. Finally, “born and raised” founders are founders regardless of the market: “They all existed and therefore raised money in 2020-2021, so they too are not starting companies and raising money at the same rate.

There are two sides forming in early-stage venture capital: the investors who admit that talent has shifted and those who stand by deal flow that is as loud as ever.

If you want to read my full take, check out my TechCrunch+ column, “Investors prepare for a founder downturn. Or influx. Wait, what?”

In the rest of this newsletter, we’ll get into Y Combinator on its shrinking class size and debut fund managers on their collective mood. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter.

Y Combinator cuts its class size

Y Combinator says it has intentionally shrunk the number of startups within its accelerator for the Summer 2022 batch. As first reported by The Information and independently verified by TechCrunch, Y Combinator’s Summer 2022 cohort — currently in action — boasts nearly 250 companies, down 40% from the previous cohort, which landed at 414 companies.

Here’s why it’s important: Over the years, Y Combinator’s ever-growing batch size has become a common — if not cliche — conversation among techies. I know this because we contribute to this conversation lots (especially on Equity). The biggest issue that folks have had with YC’s growing class size is that it threatens one of the accelerator’s biggest value propositions: network. The bigger the class, the harder it is to stand out.

While YC says it did not scale back due to critiques or the cost of its growing check size, the move will certainly help those within the current cohort stand out, simply due to lack of competition. 

Image Credits: Bryce Durbin

First-time fund managers have thoughts

TechCrunch+’s Rebecca Szkutak has spearheaded the latest investor survey, which gets a temperature check from seven first-time fund managers finding themselves in the beginning of a downturn. What advantages do first-time VCs have over more experienced competition in a challenging market? What steps are they taking to prepare for the fourth quarter? What is keeping them up at night given the market conditions today? These are all questions they answer and more in the piece now live on the site.

Here’s what’s important: There’s always a silver lining, but especially if you have a smaller portfolio. Szkutak gives us a teaser excerpt below:

“We don’t carry any of the baggage that may come with having previous funds or having a lot of capital tied up in what seems to be highly overpriced vintages,” Stuto said. “Just like a founder, who looks at the world differently than subject matter experts, we (first-time managers) bring a fresh outlook of how certain problems and industries are developing.”

Read Szkutak’s survey, and her extra analysis of it, on the site. 

A fully fruited Orange tree being harvested in a barren Southern California desert landscape; first-time investors thriving in downturn

Image Credits: Stephen Swintek (opens in a new window) / Getty Images

If you missed last week’s newsletter

Read it here: “The bootstrapped are coming, the bootstrapped are coming.” I also recorded a companion podcast with my favorite co-worker, Alex, which you can listen to here: “Is it the bootstrapper’s time to jump on the venture treadmill?”

Any requests for topics for me to dig into, either on Startups Weekly or on the show? Tweet me a big question and I’ll take a swing at it, either in an upcoming Startups Weekly or on Equity.

Image of white headphones hanging against a blue background.

Image Credits: Martin Barraud (opens in a new window) / Getty Images

Seen on TechCrunch

Club Feast quietly pivoted to catering and left its consumer customers in a lurch

Uber turns the corner, generates massive pile of free cash flow in Q2 

The 5 biggest takeaways from Tesla’s Cyber Roundup

Fish and CHIPs

Lyft assured no layoffs were coming — now employees are scrambling for their next gig

Clubhouse begins beta testing private communities called ‘Houses’ to foster curated interactions

Seen on TechCrunch+

Pitch Deck Teardown: Glambook’s $2.5 million seed deck

The road map for building the Uber of climate tech

From NDA to LOI: What really happens when your startup is being acquired?

Startups have to pay back all that equity compensation someday

Dear Sophie: How long am I required to stay at my current job after I get my green card?

And that’s a wrap. I’m off to the lake to enjoy these last few Summer weekends. Take care of yourself!

Talk soon,

N

Twitter officially rolls out its long-form content ‘Notes’ feature

Twitter announced today that it has begun testing “Notes,” a way to write and publish long-form content on the social media platform. The official announcement comes a day after TechCrunch reported that the feature would be launching soon.

A small group of writers in the United States, Canada, Ghana and the United Kingdom now have access to Notes as part of the initial testing phase. Twitter says Notes can be read on and off Twitter by people in most countries. Users who are part of the testing phase will get access to a new “Write” tab, which is where they can write and access all of their Notes. These users will also have a new “Notes” tab in their profile that holds their published work to make it easy for their followers to find their long-form content.

With the new feature, users will be able to create articles using rich formatting and uploaded media, which can then be tweeted and shared with followers upon publishing. Users will have the option to embed photos, videos, GIFs and tweets into their Notes. Like tweets, Notes will have their own link and can be tweeted, retweeted, sent in DM’s, liked and bookmarked.

Twitter Notes has the potential to change how some people use Twitter to share their more in-depth thoughts and ideas. The new feature could be particularly useful for those users who infrequently publish article-length content and don’t want the hassle of setting up and maintaining their own blog or website. It’s also worth noting that the feature marks one of Twitter’s more significant changes since doubling the character count from 140 to 280 characters.

The new feature will address situations where it can be difficult to follow threads by allowing users to put all of the text into a Note. Notes will also address situation where users had to post screenshots of their Notes app in order to tweet a large portion of text.

The introduction of Twitter Notes may pose some competition with long-form blogging platforms, like WordPress or Medium, the latter coincidentally developed by Twitter co-founder Evan Williams. If Twitter decides to integrate newsletters into Notes, the feature could potentially compete with popular platforms like Substack.

Twitter also announced today that it’s launching a new Twitter Write team that is focused on building tools for readers. The company is merging its newsletter subscriptions into Twitter Write, which is now the brand that it’s using to encompass its long-form writing efforts, including Notes and newsletters. The Write team will be focused on improving the Twitter experience for writers. The social media giant notes that its definition of writers includes journalists, bloggers, newsletter publishers, comedians, content creators, social media community managers, poets, screenwriters and more.

Twitter to expand into long-form content with upcoming Twitter Notes feature

In what could be one of Twitter’s more significant changes since doubling the character count from 140 to 280 characters, the company is preparing to launch a new feature that would support the direct publishing of long-form content on its platform. With Twitter Notes, as the upcoming feature is called, users will be able to create articles using rich formatting and uploaded media, which can then be tweeted and shared with followers upon publishing.

The feature is being tested with select users ahead of an upcoming public launch, we understand. (Twitter declined to comment but said it would share updates about the feature “soon.”)

If broadly adopted, Twitter Notes could potentially change how some people use the social media platform to share their more in-depth thoughts and ideas.

Today, it’s common for users to create numbered Twitter threads to connect a series of tweets together as a means of storytelling or when explaining any subject that stretches beyond Twitter’s supported character count. As a result of this user activity, Twitter officially embraced threads back in 2017 with the launch of a new Twitter composer screen that made multi-tweet posts — or tweetstorms as they’re also known — easier to create and publish. At the time, there were hundreds of thousands of threads posted daily, the company had said. That number has likely since grown.

But while Twitter threads encourage engagement as users click to expand the related tweets and replies, they can also be a bit unwieldy to peruse — particularly for longer content. That’s given rise to helpful bots, like Thread Reader App, which turn these tweetstorms into links where the thread’s individual posts are formatted like an article for readability’s sake. These days, you’ll often see users requesting the bot’s help in threads’ replies by tweeting out “@threadreaderapp unroll.”

Beyond threads, users have also worked around Twitter’s character count restrictions by writing long-form content in the Notes app on their smartphone then posting a screenshot of their missive. This works to quickly get a message out to a large audience, but doesn’t benefit Twitter as the text in the screenshot isn’t searchable and hashtags aren’t clickable the way text posted natively to the platform would be.

Twitter Notes could potentially offer an alternative to both problems by allowing users to instead write long-form articles directly on Twitter itself. This lets users share their thoughts, as before, while still being able to tap into the potential for viral distribution that comes with posting to the platform. Like tweets, the Notes would have their own link, and could be tweeted, retweeted, sent in DM’s, liked, and bookmarked.

The feature had been spotted in testing earlier this year by app researchers, including Jane Manchun Wong and others. Initially, Notes was being called “Twitter Article,” researchers found.

In images Wong posted in May, the feature offered formatting tools in a bar at the top of the screen similar to those you’d find in blogging software — like options to bold text, add italics or strikethrough, insert ordered lists, add links, change the style, insert media and embedded items, track word count, and more. Users could also add either 1 GIF, 1 video, or up to 4 photos to their article, as well as include embedded tweets either via URLs or their own bookmarks, the screenshots showed.

Wong noted there was also a “Focus Mode” that would expand the article to a full-screen view and hide Twitter’s sidebars. She said the feature looked fairly polished, which suggested it could be nearing launch.

 

In a related series images shared by app researcher Nima Owji this April, the feature was shown to support saving articles as drafts and an interface for accessing both drafts and published content.

When publishing a Twitter Notes, Owji found that users could check or uncheck boxes to automatically tweet the article to their feed, their Twitter Circle, or their Communities, as well as copy the article URL for sharing elsewhere — like on another website or in an email, for instance.

In the current version, now called Notes, the feature will be accessible from users’ profiles directly to the right of the “Tweets & replies” link and before “Media,” app researchers said.

Mobile product intelligence firm Watchful.ai was additionally able to confirm the development of Twitter Notes, which it found to be ready for launch in the latest version of the Twitter app. The firm also confirmed the feature was located next to “Tweets & replies,” giving it a prominent place on users’ profiles.

While this link lets users view an account’s published Notes, those who want to write new Notes can do so through a link added to Twitter’s main navigation. During tests, Owji discovered Twitter had been experimenting with this app icon, which was at one point relabeled as “Write” in the left-side column on Twitter’s web app, just beneath Twitter Blue.

Of interest, this is the spot “Newsletters” has held following Twitter’s acquisition of Revue — a choice that could point to an attempt to merge Twitter’s two long-form writing products, Notes and Newsletters.

The introduction of Twitter Notes may pose some competition with long-form blogging platforms, like WordPress or Medium — the latter coincidentally developed by Twitter co-founder Evan Williams. It could be particularly useful for those users who infrequently publish article-length content and don’t want the hassle of setting up and maintaining their own blog or website. If integrated with newsletters as well, it could also potentially compete with the popular newsletter platforms like Substack, whose authors often promote their subscriptions via Twitter.

That said, Twitter Notes could have some challenges ahead. As Facebook previously demonstrated, on-platform blogging efforts from social media companies don’t always pan out as hoped. Facebook had tried to compete in this area when, in 2006, it launched a bare-bones blogging feature (also called Notes) to offer users a way to post long-form text that wouldn’t fit in a Facebook status update. The feature was then part of Facebook’s larger strategy to chase original content but never became a popular publishing platform. Facebook quietly shut down Notes in October 2020. These days, Facebook is chasing Substack with its newsletter platform Bulletin.

But users may be hesitant to publish to a social platform where business objectives continually change, instead of to a site that’s more dedicated to long-form content publishing and distribution.

Similarly, Twitter will need to be able to convince users that its long-form publishing tool is something it’s committed to as opposed to one of its numerous experiments which could wound down if it fails to achieve traction.

On top of that, Twitter’s entire product initiative strategy is in flux as the company awaits the Elon Musk takeover to complete. Musk has said he wants to be involved in Twitter’s product, and has previously stressed his priorities were growing Twitter’s revenue and user base, while eliminating bots. A Bloomberg report also indicated Twitter has been pulling back resources across several of its long-term projects, like Spaces, Communities, and Newsletters in advance of Musk’s arrival.

Twitter is expected to launch Twitter Notes in the coming weeks, we understand — unless, of course, Twitter’s internal upheavals prevent this.

As startup layoffs continue, some perspective

Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.

Per Layoffs.fyi, a layoff tracker, over 16,000 tech workers lost their jobs in May, and June is off to a similarly brutal start. TechCrunch’s senior reporter Amanda Silberling and I have accidentally, and unfortunately, started working on a weekly column about the tech layoffs; what first started as a tip-over moment at Thrasio has soon expanded to startups regardless of sector, financing stage or if they had obvious growth tensions or not.

As the layoffs continue, it can feel like the same boilerplate story: number of those impacted, roles or teams that were reduced, severance package details and a vaguely generic statement from the CEO citing market turbulence as a key reason for the reduction. That doesn’t mean they aren’t any less newsworthy, but I’m always curious about the follow-up story opportunities. So, I asked all of you for some perspective, namely what else to ask and include in these stories.

From Jennifer Neundorfer: I’d love to see a follow-up piece with data on where people who are laid off go next. Do specific companies/industries scoop them up? Do some start companies? Something else entirely?

This question made my mind immediately jump to the talent opportunity that emerged in early 2020 when unicorns laid off chunks of staff in preparation for the pandemic. Then, I wrote a story about how startups were hiring pods of employees that got laid off, otherwise known as a not-so-new strategy of acquiring. At one point, a majority of online mortgage company Stavvy was full of ex-Toasters impacted by the restaurant tech’s 50% workforce reduction.

Beyond the rise of acqui-hiring, I think we’ll see some classic fellowships pop up that help recently laid-off people break into entrepreneurship. Neundorfer’s firm, January Ventures, started a program similar to that of Cleo Capital, which gives capital to aspiring founders to kickstart them.

The key here is that layoffs make people more risk averse, especially depending on their socioeconomic background. That mixed with the fact that Big Tech is on a hiring freeze, I don’t know what happens when a wave of people lose their jobs in a mixed messages hiring market.

But, if anyone has the data to answer this question, do send it on over!

From Anna Rasby-Safronova: Did the ones who were laid off see it was coming and how do layoffs affect mental health, anxiety and productivity of the rest of the team?

I’ve now spoken to dozens and dozens of former and current employees within struggling startups, and the reaction to layoffs largely feels like whiplash for those impacted.

The reason? The difference between layoffs in 2022 and 2020 is that many of the companies that are laying people off today are well capitalized, named unicorns just one year ago. In 2020, cuts could easily be cited to an unprecedented pandemic that complicated growth plans; while in 2022, cuts come right after leaders boasted insane growth just months prior. Add in the fact that people are still laid off in questionable ways — from severance showing up in payroll to long-winded memos — and I can’t imagine these cuts don’t aggressively impact morale internally and externally.

International workers face additional complexities when laid off, as loss of employment can put visa status in flux. Even as companies put together spreadsheets or resume support, the added volatility could mean talented workers are forced to leave the United States altogether to pursue a better life somewhere else. These are stories we’re working to tell but are sensitive for obvious reasons.

From Luke Metro: Which fraction of company’s employees were hired in the last 1-2 years? I do wonder how many companies doing layoffs did massive hiring sprees during the frothiness of 2021?

The reason this question is important is that it colors how a layoff was engineered; and if it only impacts the newest members, the most nascent products or everyone across the board — from executives to entry-level hires. If it’s the latter, it may suggest that a startup is having deep inset problems that requires a mass reorganization of its resources. If a workforce reduction largely impacts those hired in the past year, it could mean that the startup needs to scale back some of its more experimental work and hone back to where it already has product-market fit. Thanks for the tip, I’ll start asking about this!

In the rest of this newsletter, we’ll talk about multiplayer fintech and the grocery delivery world. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter or subscribing to my blog. As a programming note, I am out on vacation next week so expect an abbreviated Startups Weekly column, still from yours truly, but with support from Henry Pickavet, Richard Dal Porto and the rest of the team.

Deal of the week

A Santa Monica-based startup, Ivella wants to build banking products for couples to take away money tensions. CEO and co-founder Kahlil Lalji is launching with a split account product that just raised $3.5 million in funding from Anthemis, Financial Venture Studio and Soma Capital. Other investors include Y Combinator, DoNotPay CEO Joshua Browder and Gumroad CEO Sahil Lavingia.

Here’s why it’s important: The best solution, so far, for multiplayer fintech has been joint accounts: meaning that two people will set up an account where they — sing it with me now — join their accounts and pull from the same pool. Instead, Lalji wants to build a split account: Couples maintain individual accounts and balances but get an Ivella debit card that is linked to both of those accounts.

With that shared card, couples can set ratios — maybe prorate what percent of each bill someone pays depending on their income — and Ivella will automatically split any transactions made using the Ivella debit card. This in and of itself was the largest technical challenge that Ivella was confronted with in its early days, describes Lalji:

“The place that a lot of people fall short, just like a lot of fintech falls short, is that they don’t break the mold of what banking looks and feels like,” Lalji said. “And because we’re focused specifically on couples, we want to build a product that feels not so sterile and not just like a bank.”

The delivery market is coming down from its pandemic highs

Our own Kyle Wiggers wrote about how the on-demand delivery market’s pandemic period of rapid growth is winding down. As he notes, there are signs of a correction including Instacart’s slashed valuation, DoorDash and Deliveroo’s stock price fluctuation, and Gorillas, Getir, Zapp and Gopuff conducting layoffs while others like Fridge No More and 1520 shut down entirely.

Here’s why it’s important: As I told Wiggers over Slack, the on-demand delivery market’s lack of profitability is often talked about in a, “that’s so obvious” and broad-stroke manner. This piece got into the heart of why grocery delivery is so expensive and more specific struggles startups face in this market.

Here’s what Craft Ventures partner and co-founder Jeff Fluhr, the ex-CEO of StubHub, said to TechCrunch; despite the fact that Craft has invested in a number of delivery companies:

“The fast delivery space is the epitome of exuberance of 2021: Investors were pouring money into cash-guzzling companies with flimsy business models,” he told TechCrunch in an email interview. “Fast delivery companies are capital intensive. They require local infrastructure, local people and local operations that are expensive to build out. As a result, all of these companies have been incinerating boatloads of cash over the past 12 to 24 months as they’ve expanded to new geographic markets. Of course consumers like the instant gratification of a pint of ice cream in 15 minutes, so revenues grew quickly, driven by a great consumer experience and word-of-mouth virality. Investors followed the growth paying no attention to the potential for profitability. But the notion that a startup can deliver on that promise profitably is a pipe dream.”

Across the week

Seen on TechCrunch

Seen on TechCrunch+

Until next time,

N