Welcome to The Newsletter Operator!

This has been a massive week in the world of newsletters.

• The Peak sells for $5M

• Sparkloop was acquired by Convertkit

• The Daily Upside reaches 1M+ subscribers

• And much more happened…

In this email, I’ll break down The Peak acquisition and share all the links you need to keep up with the news.

Deep Dive

How The Peak Grew To 110k Subscribers and Sold For $5M in 3 Years

The biggest newsletter acquisition of 2023 so far happened Friday.

The Peak was acquired by ZoomerMedia for $5 million.

For those who don’t know: The Peak is a newsletter business with over 115k subscribers that covers Canadian business, finance, and tech news.

The purchase price of $5 million is composed of $3.5 million cash and a $1.5 million promissory note.

Valuation

According to Brett Chang, co-founder of The Peak, “the valuation was derived from revenue.”

The Peak was on track for $3 million in revenue this year with a 30% margin.

At the $5M sale price, that’s a ~1.65X multiple on revenue or a ~5.5X multiple on profit.

To break it down by subscriber value, that’s $43.5 per subscriber.

How The Peak Started

The Peak founders loved Morning Brew and saw there wasn’t a daily newsletter focused on Canadian business news.

So they developed an MVP, came up with a name and logo, and started writing. The first newsletter went out on July 16, 2020, and the newsletter has been going out every weekday since.

How The Peak Grew

According to Brett Chang, “We shared it on LinkedIn, annoyed our friends to do the same, and Taylor got started on paid ads.”

Based on this, it sounds like The Peak started using paid ads to grow very early.

This blog post breaks down how they grew from 0 to 8,000 subscribers in five months.

To summarize:

The first 1,000 subscribers came from brute force. The founders posted on all their social media accounts about starting the newsletter.

But most of the first 1k subscribers came from direct 1-to-1 messages. They messaged anyone on their contact list who might be interested and sent a message like this:

“Hey! Wanted to let you know I started The Peak, a daily newsletter covering the top Canadian and business news in an informative and entertaining email. Would love if you signed up: readthepeak.com”

1,000-4,000 Subscribers: Facebook and Instagram ads

They found that giveaways were getting far lower CPAs (Cost Per Acquisition) than conventional ads just about the newsletter.

These generated lower-quality subscribers, but after removing inactive subscribers, they got a ~$0.60 CPA, which is very low.

Paid ads are still a big part of The Peak’s growth strategy. However, they have since moved away from using giveaways in their Facebook ad campaigns.

We’ll talk more about their current paid growth strategy later…

4,000-8,000 Subscribers: Referral Program

The Peak created a referral program and encouraged readers to share their referral links to earn rewards.

Through referring subscribers to The Peak, readers could earn stickers, merch, and even a MacBook Pro.

In 2020, The Peak expected referrals to account for 30-40% of their subscriber growth.

Their referral program is still included in each newsletter, although now I think it’s a small component of their growth.

Growing From 8k to 115k Subscribers

I suspect these are the primary growth channels The Peak used to reach 100k+ subscribers.

In order:

1/ Meta Ads (aka Facebook and Instagram ads)

The Peak has been running Facebook ads since 2020, and there are currently over 100 ads in their Ad Library, including 10+ UGC video ads.

2/ TikTok Ads

The Peak has done a great job of creating UGC and TikTok videos that likely drive low-cost subscribers from TikTok.

Their best performing creative on Meta seems to be video, and these same videos also work great as TikTok ads.

3/ SEO

According to SimilarWeb, The Peak’s second largest traffic source is search. They rank for over 5,000 organic keywords.

4/ Referral program 

The Peak’s milestone referral program is likely a great source of automated and high-quality subscribers.

Based on seeing the referral program numbers for newsletters like The Hustle and Milk Road, I think The Peak gets less than 10% of subscribers from their referral program. However, subscribers who are referred may have a higher open rate and low churn.

5/ TikTok Organic

The Peak has grown its TikTok account to over 30k followers, with many videos getting 100k+ views.

This is probably a small source of newsletter subscriber growth now but has the potential to grow as their short-form videos get more traction on TikTok, Reels, and YouTube shorts.

How The Peak Makes Money

The Peak’s primary source of revenue is sponsorships.

They sell sponsored ad placements in their 2 newsletters and 2 podcasts.

The Peak also has an agency that creates newsletters for other companies. This was started recently and is likely a smaller source of revenue.

Canadian business and policy leaders read The Peak. 48% of The Peak’s audience are decision-makers and 55% are entrepreneurs.

That’s a big selling point to advertisers.

The Peak also has an impressive 85% advertiser renewal rate.

Check out The Peak’s sponsors page if you’re selling ads in your newsletter. There’s a lot to learn from how they position their brand and audience.

The Peak founders also broke down how they sold their first $4,000 in newsletter ads here.

Why I Love The Peak

If we learn one thing from The Peak, it’s the importance of execution.

They didn’t reinvent the wheel. They took inspiration from successful newsletter businesses in the US (MorningBrew, The Hustle, and TheSkimm) and applied the model to Canada.

And they did a damn good job.

• Their website is easy to read and navigate

• Their referral program gets readers to share

• Their newsletter content and design are excellent

• They built a valuable audience advertisers want to get in front of

• Their Facebook, Instagram, and TikTok ads are some of the best I’ve seen from newsletters

There’s no secret behind their success.

The Peak simply found a gap in the market for a Canadian business newsletter and followed the newsletter growth and monetization playbooks to a T.