Flipboard, the mobile-first “social” magazine that lets people tag, assemble and then share collections of stories from around the web, has now raised another $50 million at an $800 million valuation led by Suhail Rizvi, with Goldman Sachs close behind and existing investors like Insight Venture Partners, Index Ventures and Kleiner Perkins also participating (KPCP has confirmed its investment directly with us as well).
The news was first reported earlier today by AllThingsD, and it has now been confirmed to us by Mike McCue, CEO and co-founder of the company, who also gave us some insight into how the company is doing today — “an awesome day,” as he put it — and what it plans to do tomorrow.
But first a little backstory. Prior to today’s news, we had heard that Flipboard was actually raising money at an eye-popping $1 billion valuation. Fast foward to today and $800 million is some degree less than that. McCue says that the $1 billion figure being bandied about was no more than a careless whisper. “There were a lot of rumors about us raising money in the last year,” he says. “They weren’t accurate. We just decided several months ago to put together financing at $800 million.” He notes that one of its earliest investors, Code Advisors, played an important role in pulling the deal together.
McCue calls $50 million “a solid number for us” that it will use in a few key areas: more international expansion, finalizing a Windows 8 app, and monetization by way of hiring out more sales people and turning on some new features. “$50 million is exactly the right number for us” to do all that, he says, with the Windows 8 app and more international moves coming by the end of this year.
Flipboard, he says, is on a roll these days. Since launching its 2.0 version six months ago, which gave individuals, publications and brands the ability to create their own shareable magazines, the company’s growth pattern has changed. McCue says that Flipboard today is adding at least 200,000 new users per day, “sometimes 250,000 or 300,000.” In total there are now some 3.5 million magazines on Flipboard, everything from magazines on travelling in Barcelona (made by an enthusiast) to magazines on what the future will look like (created by Cisco). McCue says that “hundreds of thousands of readers are getting millions of pageflips” in the new format.
All of that, he says, has given the company a lot of momentum and is what made them feel “it was time to do another round of funding” to tap into that growth.
And that growth is happening outside the U.S. Flipboard is already localized in a number of markets, such as China, where it launched a native language app as far back as March 2012. Now it will be taking that up another gear. “That is what we want to do more of, not just in terms of local languages but also local curation,” McCue tells me.
First stop will be India, where “we are just starting out now and have a lot of work. Then we will continue to invest in Asia, specifically China and Japan,” he says. In Europe, “the UK is very high on the list,” and I don’t think he said that just because he was talking to me (I live in London), but because it is also such a natural extension for Flipboard’s U.S. content and it taps into a population that is extremely mobile-friendly. Flipboard already has content partnerships with the BBC, the Telegraph, the Guardian and Wired UK “who are all doing exceptionally well on Flipboard. That is a good start.”
The Windows 8 launch, meanwhile, has been long discussed, but it looks like it is finally becoming a reality. Why so long between announcing and releasing? “We wanted to make sure that the app for Windows 8 looked awesome, and it does look amazing now, but we need to make sure that we can polish it and make it even better.” Seems like with the Surface line now getting a major refresh the time to strike the iron is now.
Although Flipboard now has a sizeable number of users reading the web versions of the content being created on the platform, McCue says that mobile is still “by far the primary component” in terms of traffic. So a lot of its monetization efforts to date are focused on mobile.
McCue declined to give me a revenue figure but noted that monetization has been “very good” so far. “We have some of the world’s best brands advertising on Flipboard, such as Gucci and Louis Vuitton,” he boasts.
The trick that Flipboard has pulled off is that they’re encouraging a lot of engagement — the magic word today — between readers and those that are advertising on the platform. They’re doing this by way of the basic building blocks of the service. “When you tap on the ad, it will take you to a brand magazine. With version 2.0, these brands are curating magazines,” he says, thereby giving me and you more opportunities to stare at bags that we may never be able to afford to buy, but may do one day anyway. Other brands that have created magazines include Delta advertising its red-eye flights via a sleep-popsci magazine; and Cisco’s Futurist feed.
McCue notes that this is now “generating revenue for all of our publisher partners,” and currently Flipboard both sells ads on behalf of publishers, and publishers sometimes sell these themselves. He doesn’t say whether that is profitable, but here is both a disclosure and an example of how this works: TechCrunch is a publishing partner of Flipboard’s, and our magazine does very well on there. AOL sells ads within Flipboard on our behalf, and this generates more revenue than our in-house mobile efforts. “Financing will let us scale out our sales team and drive out more revenue,” he notes.
There will soon be more money levers to turn on. Look, for example, at the paywall gates that Flipboard has for the Financial Times and the New York Times. “We’re the only company in the world that enables that for the FT right now,” he notes. “You can become a subscriber directly from Flipboard. Over time you will see us doing more with premium content. You will see us do more there next year.”
Into this comes Suhail Rizvi, who McCue says he got to know through Twitter and describes as having a great combination of expertise on both traditional and new media. As you may know, Rizvi also has large investments in Square and Facebook, along with Twitter and now Flipboard, and so I asked McCue if that might serve as a door into further monetizing partnerships with any and all of them. No comment, but a little laugh from McCue on that question, so another area to watch as Flipboard continues to spin ahead.