Betaworks-style ‘startup studio’ Dream Industries – based in Moscow – has raised a $3 million Series A round from retail giant Ulmart (in Russia) to develop its subscription-based social reading service Bookmate. They plan to take the startup international out of Moscow, starting with Turkey, Scandinavia and Latin America. The funding is part of a $6.5 million package from Ulmart to Dream Industries, with the balance of the raise going to other Dream Industries projects, which include Exchang.es, Theory & Practice, Third Place, Telegraph and Zvooq.
Bookmate is a subscription “social reading” service covering mobile, tablet and web. It claims to have 1.5 million active monthly users in Russia, Ukraine, Kazakhstan and other Russian-speaking markets, including Turkey, and a conversion rate of 7 percent to paid subscribers accessing 400,000 books, and from 300 publishers globally.
The e-book market is big in the U.S. and U.K., but e-book consumption is just starting out in emerging markets. So Bookmate is focused on those developing markets where the competition is mainly local.
Bookmate connects publishers and authors with new markets and makes money by partnering with MNO, device makers, online retailers and local government.
Unlike Amazon, Google Books or iBooks, Bookmate is an open platform that connects publishers and readers directly. So publishers get access to user behavior analytics and have promotion tools for direct marketing. It means they “own” their relationship with their readers – very much unlike the big players we all know.
This is a very interesting move, especially as emerging markets are largely untapped by the biggest players as they really on a lot of infrastructure that doesn’t exist in emerging markets.