Social writing platform and writer’s network Wattpad has been at it for a while now, and they’ve quietly amassed a massive user base that engages regularly with the site, posting their own stories and reading the stories of others, all the while engaging with one another through feedback, criticism and support. Now, the startup has raised a Series C round of funding worth $46 million, led by OMERS Ventures, and including August Capital, Raine Ventures and Northleaf Venture Catalyst Fund, and all of the company’s existing investors.
Wattpad has around 25 million monthly active users on its network, according to CEO and founder Allen Lau, which is up from just six or seven million around the last time they raised funding, a $17.3 million Series B back in June 2012. Lau is maybe more excited by the site’s progress in terms of engagement, which they measure by time spent on site (a more reliable metric than some of the softer ones put forward by startups these days). Wattpad users spend a cumulative total of over 6 billion minutes per month on the network, Lau tells me, which is up from just 1 billion minutes per month on site in February 2012.
“To give some idea of how much content users are posting on Wattpad, they’re uploading one chapter every half a second,” Lau explained. “That’s about 150,000 uploads every day, and if you translate that to reading time, that’s about ten hours of reading uploaded to Wattpad every minute.”
That’s what led Wattpad to translate the appetite for publishing on the platform into a way to generate revenue for the platform via crowdfunding books created by the network’s authors. The crowdfunding effort debuted back in August of last year, and Lau says that while the pilot experiment is now concluded, that doesn’t mean it’s gone away for good.
“Those experiments went pretty well, all the projects met their goals,” Lau said. “We’re in the process of adjusting the specifics of Fan Funding, and are looking forward to the next evolution of the project.”
In the meantime, Wattpad still drives some revenue through search, but Lau emphasized that for now at least, the focus remains on growing its user group, rather than on unlocking the profit potential of the network. To do that, it intends to use this funding to hire more product developers and additional staff to help grow and manage the community.
Lau says they’re focusing on hiring in their hometown of Toronto, which is uniquely positioned to foster the kind of growth Wattpad is looking for. That’s because Wattpad is hoping to increase their international expansion. Currently, 50 percent of Wattpad’s network and activity comes from outside North America, and the startup would like to capitalize on that. Toronto offers an extremely diverse and multilingual talent pool to draw from to make that happen, he notes. A brand new, spacious office opening soon in downtown Toronto should help Wattpad accommodate any new hires coming off of this round.
Wattpad continues to draw interest from top-tier investors and grow its network. Lau says to watch for new product developments, especially on mobile, to help pave the way for the next evolution of the company through 2014.