Just last week, the publishing industry got the Wall Street Journal treatment for having sidestepped the disruptive effects of digital privacy. But everyone gathered on the far west side for Book Expo America might want to hold off on the high fives, because the Internet isn’t done taking aim at their business. And one Union Square Ventures-backed, Toronto-based upstart, Wattpad, just raised a $17.3 million Series B.
USV joined this latest round, which was led by Khosla Ventures. Other participants include Yahoo cofounder Jerry Yang and Toronto’s Golden Venture Partners. The company will use the money for hiring, new features, and community growth.
Wattpad is both publishing platform and social network. It’s a kissing cousin to Amazon’s self-publishing platform, but the concept will feel most familiar to anyone who spent time on early platforms like fanfiction.net–complete with concerns about copyright, by the way, though the company has introduced piracy-fighting features. The modern twist: Over 70 percent of the site’s traffic comes from mobile devices.
Founder Allen Lau insisted to Betabeat that Wattpad doesn’t have any real competitors, and contrasted the company’s model with the traditional publishing process and with more accessible paths like Amazon’s self-publishing platform. “On Wattpad, people [publish] chapter-by-chapter, so for example a lot of people will upload chapter one, then instantly he or she will get feedback,” he said. Then they can upload each successive installment as its written. “It’s a very different interaction environment.”
Their numbers aren’t too shabby, either. “In terms of user base, we have 8 million monthly unique visitors, we have over 5 million stories uploaded and each month there’s another half a million stories uploaded,” Mr. Lau said.
But success isn’t as simple as making the content available. For one thing, as anyone who’s poked around the Kindle store lately can attest, volume is no guarantor of quality. There’s a reason publishers shell out for editorial salaries, and it’s not just because they’ve always it that way. Plus, there’s a ceiling on writers’ willingness to work for free.
The company previously raised a $3.5 million USV-led round in September of last year. Founder Allen Lau explains they made several hires and “we thought it would be enough to continue to enhance the product, but what’s happening is the traffic has been growing so fast that we need to spend more time scaling the infrastructure, and that takes away valuable time in enhancing the product,” he says.
Asked what interested USV about Wattpad, managing partner Albert Wenger pushed back against Mark Meeker’s latest digital trends slideshow, which described Amazon’s Kindle as the re-imagining of the book: “The Kindle is more traditional books in a new delivery vehicle. We think that Wattpad is really more the re-imagining of the book in the digital age.” It’s a network process rather than a traditional, hierarchical process, and it’s an interactive process, he said. “It’s just a completely different way of thinking about how a story is told.”
So far, the site isn’t really competing directly with traditional publishing (except in the sense that everything on the Internet competes for our attention.) “Today it’s sitting in almost a parellel universe,” he said, adding, “I think whenever you have a big innovation that does something fundamentally different, you get usage in areas that previous usage didn’t exist.” For example, many of the people writing on Wattpad are those who aren’t published anywhere else, and there’s a substantial amount of Wattpad usage in countries where books are less accessible, such as in the Philippines and Vietnam.
But Mr. Wenger is confident about the platform’s potential: “Ultimately this kind of network model is going to very large and can maybe not ever subsume the old, but can rival the old in scale and in importance.”
