Morning Brew: $500 in Revenue in Its First Two Years — Then a Majority Sale in All Cash at a $75M Valuation Five Years On

Its first two years of revenue totaled $500. Five years later, the company was valued at $75 million and a majority of its shares were bought in all cash. The sale of business newsletter Morning Brew was first reported on October 29, 2020 by Axios media reporter Sara Fischer. The buyer was Insider Inc., parent of Business Insider. The roughly $75M valuation is a reported figure, “sources tell Axios”, and the parties never published the number.

Morning Brew began in 2015, when Alex Lieberman, then a student at the University of Michigan’s Ross School of Business, started summarizing financial news for friends. At the time it was literally a PDF attached to an email. The premise was clear-cut: write for young professionals whom the Wall Street Journal and the Financial Times were ignoring. Austin Rief joined as co-founder, and the two went classroom to classroom pitching Morning Brew and collecting email addresses by hand.

The Numbers

• 2015: Launched in Ann Arbor; subscribers built through classroom tours and handwritten sign-ups
• 2015–2017: Total revenue for the first two years — $500
• 2018: Starts buying ads in other newsletters. “In 2018 the newsletter monetization market was nascent. Everyone was underpricing their ads. We were able to buy ads at a 50–75% discount on what was charged a year later. We bought ads in every newsletter that would let us.” (Rief)
• 2018: Promoted Instagram Stories arrive; subscriber acquisition cost drops to 10 cents. “We were refreshing ads manager every 15 minutes… While those crazy numbers only lasted a week, it changed the trajectory of Morning Brew growth forever.”
• 2018: Content syndication partnership with Business Insider begins
• October 2020: Insider Inc. acquires a majority stake in all cash at a valuation of about $75M (per Axios)

By the sale, the business had grown from a free ad-supported newsletter into vertical siblings like Emerging Tech Brew and HR Brew, podcasts, and courses (the Morning Brew Accelerator). The founders kept a sizable minority stake with earn-out clauses. Rief became CEO and Lieberman executive chairman, joining a newly created board alongside Insider Inc. CEO Henry Blodget. Lieberman told Axios, “We are incentivized to be profitable and to grow quickly”, a structure that preserved operating control and growth motivation even after ceding the majority. Per the Axios reporting cited by Nieman Lab, none of the roughly 60 employees were laid off and the brand kept operating independently. The deal also brought Morning Brew a fresh audience of 2.5 million primarily millennial and Gen-Z readers from Business Insider.

What This Case Teaches

The engine of growth was one consistent move: buy new ad channels before their prices are discovered. In 2018 the newsletter ad market was immature (everyone was underpricing, in Rief’s words) and inventory sold at less than half of what it would cost a year later. Promoted Instagram Stories were exploited in the same window of distortion, hitting 10 cents per subscriber. In both cases the point is not “they found a cheap channel” but “they poured money in at full force the moment the channel was cheap”, an arbitrage available only to first movers.

The path to the sale is instructive too. Insider Inc. had been a content syndication partner since 2018. Two years of collaboration matured into an acquisition. Rather than shopping for a buyer cold, an existing relationship grew into the exit, a pattern shared by other media exits like the sale of newsletter The Peak. And the “don’t sell everything” design, hand over a majority while keeping a minority stake and earn-outs, let the founders combine liquidity with continued upside.

The free, ad-supported newsletter model stands in contrast to Lenny’s Newsletter, which grew on paid subscriptions. Morning Brew charged readers nothing, grew to three million, and sold advertisers access to them. Subscriber count converts directly into ad inventory, so the acquisition-cost arbitrage translated directly into enterprise value.

What Didn’t Work, and the Tailwinds That Died

The headline numbers are dazzling, but the middle years were unglamorous, and some moments cannot be repeated. For the first two years revenue was near zero, $500 is a record of how long a media business can earn nothing before it works. Next, the 10-cent Instagram subscriber cost that changed everything vanished within a week. As Rief himself calls them, those were “crazy numbers”, a transient distortion, not a strategy. You cannot target that price today. Arbitrage only matters if you are organized to bet fully the moment you spot it.

And, once more: $75M is a reported figure. The $20M revenue and $6M profit were 2020 projections, never published as audited results. In deals where the parties disclose nothing, valuation talk tends to run ahead of verifiable fact. Read accordingly.

What Generalizes, and What Doesn’t

Three moves generalize: identify an ignored audience and build a dedicated product for it. Concentrate spend on ad channels while their pricing is still distorted. And cultivate existing relationships, like a syndication partner, into exit candidates. Two students could start with no outside capital because a newsletter’s marginal cost is near zero, and that structure still holds.

But 2018’s ad-price distortions will not return, and the “business news for young professionals” gap was filled by Morning Brew itself. The same playbook in the same market will not work twice. What transfers is not any single tactic but the speed of decision: channel distortions are short-lived, when you find one, bet without hesitation.