Toronto’s Wattpad Secures $17.3 Million Funding Round

By: Kuljit Grewal  |   July 13th, 2012   |   Business, Mobile Apps, O Canada

Wattpad, a Toronto-based start-up dedicated to the sharing and discovery of written content have secured a significant bit of cash from several U.S. heavyweights thanks to their incredible user engagement and disruptive concept. The company, and more importantly their site have a dedicated community of writers and contributing authors who upload and share their work with the community. The result has been an incredible 1.7 billion minutes spent on the site in May of this year, a rate that has been doubling every steadily every few months.

 

More importantly, the site represents an avenue for talented and aspiring writers to publish their content for mass consumption, something that has not been possible prior to Wattpad’s concept. It can be considered as something akin to YouTube for written content. According to co-founder Allen Lau, the company’s purpose has always been the same since its inception in 2006.

 

“Don’t get me wrong, this is a private company and I want to build a big business, but I also want to change the world in a positive way and Wattpad has given me the opportunity to do that because I’m providing this creative outlet for a lot of people who otherwise wouldn’t be able to achieve their dream.”

 

Prior to a Series A round of $3.5M in 2011, the company had been surviving on a shoestring budget, focusing instead on building a loyal and dedicated following that would stand against the test of time. Once they were able to prove this in terms of metrics, the company has been able to bring home some serious USD to aid in their hiring and growth.

 

The Series A round was led by Union Square Ventures, which has also had its money in early with companies such as Twitter, FourSquare and Tumblr. Other investors included W Media Venturesand Toronto’s Golden Venture Partners. For this much larger growth round, San Francisco stalwart Khosla Venturesran point along with all of the Series A investors re-upping as well. Yahoo! co-founder Jerry Yang also participated.

 

Wattpad possesses a great deal of potential for investors and writers alike on many fronts. First and foremost, the amount of user engagement is comparable to that of Pinterest, with several works of previously unknown authors being read millions of times. From an investment perspective, display advertising along with the recent expansion into specific website content has the potential to generate a great deal of revenue. An example of content would be Wattpad’s partnering wit Sony Music to develop branded written content about star boy band One Direcrtion, which has earned the site millions of views and self-proclaimed new fans. Last but not least, the site’s focus in on mobile content via the Freda ebook reader, understanding the need to cater towards mobile in our ever advancing world.

 

The needle is definitely pointing up for Wattpad, and we sincerely congratulate them and wish them the best as they continue in a world that will never be over-saturated with strong written content.