Subscription Kids Book Club Literati Raises $12 Million in Funding

Investors are banking on continued growth in an increasingly crowded marketplace.

Subscription Kids’ Book Club Literati Raises $12 Million in Funding

Source: Literati

Literati is on a mission to inspire kids ages 0 to 12 to become readers for life. The Austin-based subscription book club announced it secured $12 million in new capital in a Series A funding round led by Nikhil Basu Triveldi at Shasta Ventures, that will help it do just that. Other investors include Dick Costolo of 01 Advisors, Katie Jacobs Stanton and Jessica Verilli of #Angels, Dan Graham of Austins Springdale Ventures, Kevin Hartz, Thomas Lehrman, Allan Hubbard, Founders Fund Pathfinder, Silverton Partners and Brent Montgomery of Wheelhouse. The three-year-old Literati will use the infusion of cash to grow the business and hire new employees.

“Our mission is to build a lasting company that stands for lifelong learning and sparks revolutionary excitement in books and literature,” said Jessica Ewing, CEO and co-founder of Literati. “We hit our stride in this round, adding key investors who really get our vision. We want to build consumer products that make life more meaningful, not merely more efficient.”

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Subscription Kids’ Book Club Literati Raises $12 Million in Funding

Source: Literati

Literati offers five different book clubs, based on age range: Club Neo (0 to 3 years old), Club Sprout (3 to 5 years old), Club Nova (5 to 7 years old), Club Sage (7 to 9 years old) and Club Phoenix (9 to 12 years old). Membership in the book club is $9.95 per month, plus the cost of books members want to keep.

Each subscription box includes five curated, themed, age-appropriate books and surprises like custom artwork and personalized book labels. Parents have seven days to check out the books and decide what they want to keep. Prices are based on Amazons list price and returns of unwanted books are free. Parents can choose to skip months and cancel their subscriptions at any time.

“I’ve been on the lookout for the next great consumer subscription business, having invested at Shasta in category-defining brands such as Dollar Shave Club, Imperfect Foods and The Farmer’s Dog,” said Nikhil Basu Trivedi. “The book market is massive, and Literati’s growth, customer love and mission really blew me away as I spent time with Jess, Kelly, and the Literati team. I’m thrilled to lead Literati’s Series A and to join the company’s board of directors.”

Costolo also commented on why Literati is an attractive investment.

“Literati is a shining example of the innovative new companies that are being built outside of Silicon Valley. Jessica’s vision for the company is expansive and inspiring, and it is revolutionizing one of the last undisrupted media channels – the massive books market. We are excited to see the next phase of growth for Literati, said Costolo.

In addition to the book club, Literati donates books to charities. So far this year, they have donated more than 18,000 books.

Insider Take:

Aside from the uniqueness of the books (undiscovered authors, graphic illustrators and personalization), we arent sure what the attraction is here. Yes, the company has seen growth, and childrens book clubs are popular – but Literati is not selling the books really. It is selling the curation and the experience which can be duplicated by other companies. If Literati is matching Amazons list price for each book, there isnt much new or different here. There are other kids book subscription services available, but in exchange for a subscription fee, they actually provide children with books, activities and other surprises. It is possible Literati has more differentiating factors than we are seeing, but at face value, this book club doesnt look like it provides the value that some of its competitors do.