Inkitt, a data-driven publishing house, has scooped $59m (£42m) in funding from investors including the owner of Macmillan, Stefan von Holtzbrinck, and former c.e.o. of Penguin Michael Lynton, to accelerate the company's continued global expansion, with sights set on San Francisco for a new business hub.
The Berlin firm secured the cash in a Series B funding round, the second round of funding for a company through investment including private equity investors and venture capitalists. Series B funding can help companies increase market share and improve scalability once they are past the start-up stage. Inkitt said it is one of the largest Series B raises for a Berlin-based business.
The round was led by Scott Sandell, managing general partner of NEA. Other investors who took part in the round included Mathias Döpfner, c.e.o. of Axel Springer, alongside previous investors Kleiner Perkins, H V Capital, Redalpine and Speedinvest. Sandell will join Inkitt’s board of directors, and Döpfner will receive an observer seat.
Inkitt says it will continue its expansion into new genres and storytelling formats, following the launch of its new thriller category and entry into the audiobook space. Its technology enables the platform to showcase data-driven blockbusters. This includes a data model that identifies new talent and refines stories through user experience testing and monetisation. The company says this approach means it has a "significantly higher hit rate discovering debut authors than the traditional publishing and media houses".
The firm says it currently has seven million users and 300,000 writers from all over the world. Inkitt will also invest in its team, with new roles across engineering, marketing and finance, as well as a particular focus on hiring US-based talent. The company already has an 80-strong team based in its Berlin office, including hires from Netflix, N26, Blizzard, Babbel, Glovo and Yandex. Agent Rebecca Friedman was hired earlier this year as its director of author relations.
Ali Albazaz c.e.o. and founder of Inkitt, said: “I’m thrilled to welcome Scott and Mathias to Inkitt’s board; it’s incredibly exciting to be working with such world-class investors and executives as we continue to build the Disney of the 21st century together. The Inkitt team has worked extremely hard to develop the most systematic approach to discovering the best stories worldwide, building tools and processes to turn them into commercially successful stories in text and audiobook formats. I see the massively oversubscribed funding round we just closed as a trophy for the Inkitt team’s hard work, dedication and commitment to our mission to discover hidden talents and turn them into globally successful authors. All that said, this is just the beginning of our journey and I’m very much looking forward to building the best destination for entertaining billions of consumers around the world.”
Sandell added: “Inkitt is well-positioned to become the future of storytelling, having already moved beyond traditional content forms to new formats that are innovative and engaging for millions of readers. A critical shift is taking place in how people consume stories, and Inkitt understands that. We are thrilled to partner closely with Ali and the rest of the Inkitt board to help drive what is sure to be an exciting and exponential phase of growth."