Book sales during the pandemic have increased, and it appears the amount we read has increased too. And Inkitt, the startup that operates a popular free platform of the same name that allows anyone to write and post stories – stories that Inkitt then analyzes using data science to determine which of them. between them take it to the next level to produce longer works for its own account. paid app, Galatea – has raised $ 59 million in funding that could help it capitalize on this moment. The valuation with Series B is not disclosed, but from what I understand from a reliable source it is around $ 390 million.
The funding will be used by Berlin-based Inkitt to continue to develop its algorithms and technology, hire more people in particular to expand further into the North American market, and work on how it could expand the platform to more. long term. It might involve more formats beyond playback (it’s now taking first steps in audio, for example), and it might also involve creating APIs and SDKs so that other parties, such as other publishers, can use its tools to also test shorter works to see what might work as books.
Inkitt has experienced strong growth over the past two years – the company now has 7 million users (AKA readers) and a community of 300,000 writers, nearly three times the 1.6 million readers and 110 000 writers she had when I covered her last round in 2019.
The startup has also caught the attention of other industry players, highlighted by those investing in this cycle. Scott Sandell, Managing Partner of NEA, co-led the investment with German publishing giant Axel Springer. Michael Lynton, president of Snap (and in his previous lives, CEO of Penguin Books and senior Disney executive who started Disney Publishing); and Stefan von Holtzbrinck, chairman of the eponymous publishing giant (which owns Macmillan among others), also participated, alongside Kleiner Perkins, HV Capital, Redalpine and Speedinvest. Kleiner led Inkitt’s Series A.
The platform’s writers – at least those whose early chapters match Inkitt’s algorithms well, which they then turn into longer works that resonate with readers – are also seeing big numbers, with some notable fairy tales. among them.
Seemran Sahoo, from one of India’s poorest states, Odisha, has earned $ 2.7 million so far from The arrangement, a novel that she wrote and published on Inkitt entirely on her smartphone. Sapir Englard from Israel originally wanted to use the product of his germinated Inkitt book, Millennial Wolves, to finance her tuition at Berklee College of Music in Boston; she has earned $ 8 million to date from the novel. (Both were released ahead of Inkitt’s last fundraising round: they continued to generate a lot of sales.)
These are outliers, but Ali Albazaz, founder and CEO of Inkitt, says those who succeed for Galatea can still be very successful. âThe majority of our Galatea writers have made over $ 100,000 in sales,â he said. But while books are at the heart of what Inkitt does today, Albazaz is inclined to describe his broader view of Inkitt as more than just reading: the company has started to take small steps in audiobooks. , and there are plans to develop movies, TV shows, merchandising, games and maybe even a theme park: “the Disney of the 21st century” in his words.
This trip is consistent but it’s not done at breakneck speed: that’s almost exactly what Albazaz told me is his plan in 2019 as well. (Some things didn’t stay that important: The company’s original selling point on Galatea was a set of “effects” that it would add to books, sounds, and shakes, which would make the ‘more immersive reading experience These are still there, but it seems they are no longer the focus of every experience, and even Albazaz only brought up the effects of our conversation after the fact.
As to why Disney’s vision has yet to be realized, to be fair, we have been in a pandemic, and going fast, breaking things up isn’t always the best way forward. Additionally, although Albazaz said the company receives “between two and four requests each week from TV, film and production companies” to create content-based Galatea / Inkitt books (as a (publisher, Inkitt owns the rights to the film and other options) he has yet to sign any agreement. Part of it is because of this idea of ââDisney: Inkitt wants to play a role in the sequel.
âWe are looking for what is best for us,â he said. “We want to leave the possibility of having a video on Galatea.” This is also another area where Lynton, who also spent years as CEO of Sony Pictures Entertainment, could help.
Like other self-publishing platforms like Wattpad – which went further in its own âDisneyâ ambition, with a wide range of content from works that got their first oxygen on its platform; Wattpad earlier this year was bought by Korean Naver for around $ 600 million.
Built as an alternative to Amazon – Albazaz is unequivocal about its contempt for the e-commerce giant, which “took away all the margins and lowered the profits” on books and ruined the reading experience with its Kindles – Inkitt also has his own quirks that don’t sit well with everyone. One prominent author – name withheld – was curious about how a new work could go through the Inkitt machine and submitted it for publication. Inkitt’s data science engine – which has no sentiment on who writes, just what might “work well” – has made many suggestions on how the story should be edited in order to do well with it. the readers. The author was “furious,” said Albazaz, as was the author’s editor – not least because of what the author had done with it. their delivered. The author ignored the suggestions and the book was published as the author wrote it. The book has sold 1 million copies, which is fine for some, but nothing to do with the author’s previous blockbusters.
“Those 1 million bought it because of the author’s name,” he said categorically.
Longer term, it will be interesting to see if Inkitt can not only support his growth and leverage it as he wishes in a bigger media game. Because so many ideas for other content sprout from the stories you read, it’s inevitably an area that Amazon, and others like ByteDance (which already gives chills in the publishing world). ), might also want to explore over time. Amazon has done extensive A / B testing for other parts of its operations, although it hasn’t made huge strides in creating a product to apply to its self-publishing efforts. â¦ Not yet, at least.
This is all also talking about great opportunities and current traction, which investors love to see.
“Inkitt is well positioned to become the future of storytelling, having already moved beyond traditional forms of content to new, innovative and engaging formats for millions of readers,” Sandell said in a statement. âA critical change is taking place in the way people consume stories, and Inkitt understands that. We are delighted to partner closely with Ali and the rest of the Inkitt Board of Directors to help drive what is sure to be an exciting and exponential growth phase. “
âInkitt’s technology is amazing, very successful and truly exemplifies the future of storytelling,â DÃ¶pfner added. âWhen you consider the number of highly commercially successful Inkitt authors, you can clearly see how deeply this business has disrupted the way people consume books. We are excited to be a part of the further development and to work with them throughout their journey. “