Scribd Raises $58 Million in Equity Financing from Spectrum Equity
Funding will support growth, product innovation and company's mission
Scribd has much to be thankful for this Thanksgiving. The 12-year-old eBook company announced on Monday it has raised $58 million in equity financing in a funding round led by Spectrum Equity. Scribd will use the investment to further its growth and product innovation, enhance operations and support the company’s mission to change how the world reads.
“We’re excited to partner with Spectrum Equity, a firm with deep expertise in high growth subscription businesses, as we prepare for the future,” said Trip Adler, Scribd founder and CEO, in a blog post.
“By partnering with the world’s best publishers of all types of content, Scribd has introduced a first-of-its-kind experience for readers, while unlocking a new revenue stream for the publishing community. This funding will enable us to continue to operate sustainably and efficiently while accelerating our growth, product innovations, content acquisition and continued investment in our employees,” added Adler.
Pete Jensen, managing director of Spectrum Equity, commented on his firm’s investment.
“As a differentiated content library, including robust user-generated content and ebooks and audiobooks from top tier publishers, Scribd is poised to be the leading online subscription reading service for consumers across the globe. Spectrum has been fortunate to be a part of successfully scaling several digital content businesses, and we look forward to partnering with Trip and the entire management team to help make Scribd a part of readers’ everyday lives.
Scribd launched in 2007, but didn’t bring its first subscription service to market until 2013. Since then, the company has tweaked its offering several times. Here are a few of the changes:
- November 2014: Scribd adds audiobooks.
- July 2015: Scribd dramatically reduces the number of romance titles it carried, because of heavy-volume reading by subscribers.
- December 2015: Scribd adds sheet music.
- November 2016: Scribd adds magazines.
- May 2017: Scribd adds news articles from publications including The New York Times, The Wall Street Journal and the Financial Times.
Currently, subscribers can access an unlimited number of books, audiobooks, magazines, articles and documents for $8.99 a month, following a 30-day free trial. There are some limitations, however, particularly for frequent readers.
The company’s terms and conditions say, “Some subscription content may not be immediately available to the small percentage of users that consume an unusually high volume of subscription content. Scribd reserves and shall have the right in its sole discretion to add, modify, withdraw or delay at any time, any particular subscription content from access by you for any reason including, without limitation, based on the costs generated to Scribd by such content or the nature of your use of the Scribd.com website. Scribd makes no guarantee as to the availability of specific titles or the timing of their availability.”
Scribd also reserves the right to modify or withdraw subscription content from access by subscribers at the request of a publisher.
Today the company has more than 100 million unique monthly visitors, and its customers have spent more than 190 million hours reading on the Scribd platform. The company has more than 1 million paying subscribers, generating at least $108 million in recurring revenue annually.
Scribd's biggest competitor is Amazon's Kindle Unlimited subscription service which offers similar content and pricing. The biggest difference between Scribd and Amazon's Kindle Unlimited is that Scribd offers a variety of content, not just ebooks and audiobooks. It also offers magazines, news articles, user-generated content and sheet music. Scribd seemed to struggle for a while with a business model that worked, but it seems to have stabilized. Now, with this funding source, Scribd can look beyond sustainability toward growth.