It was just in September that Wattpad announced it had secured $3.5 million in Series A financing. Now, nine months later, they've closed another round of funding—a whopping $17.3 million.
"We still have a lot of money in the bank," says Allen Lau,
Wattpad's co-founder. "The [original] plan was to raise Series B next year, but the traffic was growing so quickly that we thought it was a good time to raise a bigger round and secure the future."
Wattpad is a social media platform for sharing stories; it currently hosts five million user-generated pieces of writing in 25 languages. A key focus for the company and its users is fostering relationships between writers and readers: authors engage with their audience while developing story outlines, for instance, or seek feedback as they publish a novel in chapters. The growth was so strong, explains Lau, that "we ended up spending time and effort in sustaining activities—adding more servers, making sure our infrastructure was scaling up—rather than improving the product per se."
The Series B financing, spearheaded by San Francisco's Khosla Ventures (also including former Yahoo! CEO Jerry Yang and current investors Union Square Ventures and Golden Venture Partners), will enable Wattpad to focus on enhancing its product, with a particular emphasis on the streamlining the user interface and boosting social functions on its mobile apps. They'll be doubling their current staff complement, going to 40 from 20, and are currently seeking a talent acquisition specialist manager to help them manage that growth. Lau says they will be primarily seeking developers, designers and community managers.
Citing an old business maxim, he adds: "The best time to raise money is when you don't desperately need the money."
Writer: Hamutal Dotan
Source: Allen Lau, CEO and co-founder, Wattpad