WattPad CEO Allen Lau has a bold but straightforward vision: he wants to revolutionize how people read, write and publish books. And now he has another $17.3-million to aggressive go after this goal after raising capital in a deal led by Silicon Valley’s Khosla Ventures.
The financing, which also includes Yahoo co-founder Jerry Yang, Union Square Ventures and Golden Venture Partners, comes less than nine months after WattPad raised a series A round of $3.5-million, and reflects the Toronto-based company’s strong growth.
Since October, Lau said the amount of time spent by users on the service, which lets users write and read books has doubled to 1.5 billion from 750 million, while the number of monthly visitors has climbed 33% to eight million.
The Target: 100 Million Users
For Lau, the ability to raise a significant round gives him the financial muscle to launch new features, double the number of employees to 40 within a year, and start to scale the service to support the ambitious goal of having 100 million unique visitors a month.
“It’s a dream come true, but this is not the end game,” he said during a chat at a downtown cafe. “When you raise a round, it’s like ground zero. It’s the next chapter, and the best is yet to come. We’re only 5% of where we want to be.”
It is refreshing to hear Lau’s confidence and goal to make WattPad a large and disruptive player because Canadian startup entrepreneurs need to have global ambitions – even it does make us seem “Un-Canadian”.
At the same time, it’s impressive to see WattPad attract a high-profile investor such as Khosla Ventures, which is headed up by serial entrepreneur Vinod Kholsa. Lau said Khosla is an ideal investor because it is not simply looking at WattPad as a short-term opportunity to make a lot of money.
“Vinod cares about making an impact,” he said. “He wants entrepreneurs to build something transformative; he’s not looking to flip the company in two years. His goal is to build companies that can transform and revolutionize an industry in 10 years. He sees us completely transforming the way the book industry will work.”
While the capital will let WattPad add more features and drive its marketing and community activities, Lau said it will also provide the company with time to establish new ways to generate revenue.
WattPad currently makes money from banner ads, but Lau said this is probably not the long-term business model because it’s not a “native” revenue source. While he wouldn’t disclose any details, he said there are several monetization strategies being pursued, which will have to balance WattPad’s need to have revenue with the passion its growing number of users have for the service.
One question I had to ask Lau is how an entrepreneur gets their head around having $17.3-million in bank. He said after boot-strapping WattPad for three years before the series A round last year, he had a lot of time to put together a plan on how to spend it.
With a bullish approach to growth, a growing number of users and the support of high-profile investors, WattPad should have no trouble figuring out where to spend the money.