Morning Brew claims 1 million subscribers, $3m in revenue — and a profitable business

Those milestones set the stage for what the publisher hopes will be an even healthier 2019. Morning Brew wants to grow the audience for its core newsletter, which covers finance and business news for a millennial audience, to 2.25 million by the end of the year. The company also wants to eventually build six-figure audiences for the specialized newsletters; it expects that one or two might hit that milestone within 2019.

Already “highly profitable,” Morning Brew also plans to more than double its revenue in 2019, Rief said. The company generated $3 million in revenue in 2018, Rief said. Morning Brew has 11 full-time employees.

Newsletters might not be considered a cutting-edge digital product, but they have powered some of digital media’s big success stories. Axios, for example, has built its business around email newsletters. This has powered it to a self-reported $24 million in revenue and break-even. On the Digiday Podcast last October, Industry Dive CEO Sean Griffey said its network of industry newsletters is solidly profitable with $22 million in revenue.

Morning Brew’s subscriber base experienced a major growth spurt in 2018. In April 2018, three years after its launch at the University of Michigan, it had 180,000 subscribers. By November, that number had ballooned to more than 700,000.

Rief said that the growth was powered in large part by word of mouth, but Morning Brew took advantage of some proven marketing tactics, too. For example, 2018 was the year that Morning Brew began leveraging cross-promotional partnerships with other newsletters they saw having similar audiences, such as a newsletter published by CB Insights and Next Draft, a newsletter written by angel investor Dave Pell.

Much like other hit newsletters including the Hustle and theSkimm, Morning Brew also found some success using a referral program to grow readership. Over 50,000 Morning Brew subscribers have referred at least three subscribers, Rief said.

Those tactics haven’t done much to dilute the quality of Morning Brew’s subscriber base. Its daily newsletter boasts a unique open rate of around 40 percent, high for a media newsletter, according to Mailchimp data.

That combination of subscriber growth and high open rates attracted a large number of new advertisers. Going into 2018, Morning Brew had worked with just four advertisers, co-founder Alex Lieberman said. It currently has active relationships with more than 50, including finance and banking companies such as JPMorgan Chase and Fidelity, as well as consumer brands such as Casper and Allbirds.

Sponsors pay for native ad placements that appear in each newsletter, both written by a Morning Brew copywriter and approved by the client. Today, Morning generates around $200,000 per week in advertising revenue. It has already sold 90 percent of its ad inventory through the first half of 2019, a spokesperson said. The goal, Rief said, is to double revenue in 2019, though he acknowledged that there is an opportunity to surpass that target if it keeps pace with the revenue it’s pulling from advertising.

Morning Brew’s model is made to be lean: each vertical newsletter will be written by a single person.

Though expanding from one product to another can have its challenges, observers see logic in Morning Brew’s nascent vertical approach. “It’s better to have multiple distinct products available than to try and build ‘one newsletter to rule them all’ because it’s easier to explain and sell their distinct audiences directly to advertisers,” said Keith Sibson, svp of product and marketing at PostUp. “‘Millennial professionals interested in business and financial’ is sellable, an audience receiving and mix and mash of different content, less so.”

It also plans to grow on its own. Though Rief and Lieberman thought last year they might try to raise a round of venture capital in 2019, they have since abandoned that idea. “It’s not that we’re set in stone on not raising capital,” Rief said. “We’ve just learned from other media companies that have taken on capital and grown too fast.”

Over time, Morning Brew would like to expand beyond the inbox and offer more products and services to its readers. But these aren’t on the road map for 2019.

“We’re very heads down,” Rief said. “We’re looking to grow a sustainable business.”