The number of Morning Brew subscribers exceeds 4 million as it plans to expand with M&A

Alex Lieberman and Austin Reef on Monday, January 20, 2020 –


Morning Brew is ready for adulthood.

What began as an easy business newsletter for college students, which two students at the University of Michigan dormitory turned into a multidimensional media operation. The company’s main product, the Morning Brew daily newsletter, exceeded 4 million subscribers after the race by 3 million just a few months ago, co-founder Austin Reef told CNBC in an interview.

Gaining in popularity, Morning Brew now has more than 230 employees who create newsletters for retail, marketing, HR and new technologies. 27-year-old Reef and co-founder Alex Lieberman, 28, is pushing for podcasts and shows on YouTube to expand the brand.

Reef said Morning Brew sales in 2021 were about $ 50 million, more than twice the annual revenue of $ 20 million in 2020. Almost all of the revenue came from advertising, including advertising on the newsletter. The company has been profitable since its inception, with current profits “double-digit,” Reef said.

“We want to make business news more enjoyable to read,” Reef said. “We view our competition as anyone and no one. It’s an economy of attention, so we compete with everyone. But in terms of direct competitors, we do not have them. “

Many newsletters were developed during the Covid pandemic as simple ways to spread information among remote, scattered audiences. Outdated media outlets, such as The Wall Street Journal and Bloomberg, have dumped on their resources to build a loyal audience and subscribers. The New York Times has more than 71 newsletters, Digiday reported last year. Smaller media companies, such as Axios, Politico, Punchbowl and Puck, are also counting on them as a way to expand their reach.

However, there are indications that the growth of the newsletter has a ceiling. TheSkimm, a media company focused on professional millennial women, hit headlines in 2018 with a whopping 7 million subscribers to its flagship newsletter Daily Skimm. That number has been growing since four years ago, but much slower, says a person familiar with the numbers of their subscribers. A TheSkimm spokesman declined to disclose the current subscriber numbers of the newsletter.

Business in business

Morning Brew has an unusual structure that contradicts its own growth. The co-founders sold a majority stake in Morning Brew Insider in October 2020, valuing the company at $ 75 million. Insider itself is owned by German digital media conglomerate Axel Springer.

This is business to business creation. Reef and Lieberman work independently of Insider and Axel Springer. They have their own board, consisting of executives from both Insider and Axel Springer, including Insider founder and CEO Henry Bladgett.

Reef considers the acquisition of Insider a springboard for its recent growth. Since announcing the sale in late 2020, Morning Brew has hired 180 of its 230 employees, leading to additional verticals and a much larger presence on TikTok, Instagram and Twitter.

Headquarters of Axel Springer Publishing House in Berlin, Germany.

Sean Gallup Getty Images

Reef said his company is looking to acquire other media firms to expand further.

“We want to do more of what we do now,” he said. “We want the verticals to target new industries, and more creators on the platform who talk about money, work and business news.”

Reef declined to comment on any specific targets set by Morning Brew, though said the deal was inevitable.

Audience growth

One of the potential partners could be theSkimm. Co-founders Daniel Weisberg and Carly Zakin have had “dozens of conversations” with merger partners and potential buyers over the past three years, according to a person familiar with the case. Unlike Morning Brew, which did not take money from venture companies, theSkimm accepted about $ 28 million in venture funding, according to Crunchbase. These investors want their capital back. A theSkimm spokesman declined to comment to M&A.

Carly Zakin and Daniel Weisberg launched in 2012 the millennial-focused daily newsletter theSkimm.

Source: theSkimm

Both companies share a purposefully light tone with a clear goal of enlightenment. Reef says the goal is to be “witty” but not “funny in order to be funny.”

As Lieberman and Reef grew older, Morning Brew coverage tracked their life circumstances, first targeting college students interested in business and then turning directly to young professionals. Today, the average age of a Morning Brew subscriber is 30 years. The wide target audience is 25 to 40, Reef said.

Reef and Lieberman have already made millions by selling a majority stake in Morning Brew. This has reduced the pressure to expand the company’s valuation by switching to subscription products. Cartoon estimates for advertising new media companies typically make one to three times the annual revenue, while subscription products such as The Athletic can give an estimate of five to eight times the annual revenue.

However, Reef said he is open to a subscription-based product if he feels the company is reliably releasing content that will be paid for by a special audience. Meanwhile, Morning Brew has launched an educational product that hosts weekly virtual classes on topics including audience building, storytelling, finance and leadership. Programs typically cost between $ 500 and $ 2,000, depending on the duration.

Morning Brew has also launched a business tied to specific coverage areas such as Emerging Tech Brew and Marketing Brew, as well as a commercial site that sells branded coffee mugs, clothing and other fancy business-oriented items such as a pair of Ilona Mask socks with hearts .

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The number of Morning Brew subscribers exceeds 4 million as it plans to expand with M&A

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