The company, co-founded by CEO Paul Cameron, previously raised US$3 million Series A financing, and now it has added a further Series B investment round of US$5 million. Previous investors include Paypal co-founder Peter Thiel and Kiwi movie-icon Peter Jackson.
Idealog spoke to Cameron about the future of publishing, reading in schools and just how one goes about spending US$8M.
Idealog: Booktrack have just completed its second round of funding, pulling in a further NZ$7.5M. Congratulations. Who did you work with to pony up the dough?
Paul Cameron: COENT Venture Partners out of Singapore and Sparkbox Ventures are two of the lead investors, but we’ve got a variety of different groups involved, including our existing investor base. We’ve got inventors from Australia, Singapore and the United States.
Image: Booktrack CEO and co-founder Paul Cameron
You’re quite successful at raising money, but what’s the strategy here? Is this money needed to achieve a specific goal or are you still looking to raise more?
We’ve just finished this one, so I’m not really looking to the next one just yet. It’s more about focusing on the business at the moment, and that’s what that investment will do - enable us to grow the business.
So what ways are you looking to grow? Is it just a marketing budget?
We have established a new marketing team. They’re based in Toronto and led by Liz Ridout, former VP and marketing with the Kobo team.
But what it also means is that we’re really focused on increasing our premium content – working with more prominent publishers and more prominent artists. We’ve got a comprehensive audio library with material from top studios, so now we’re looking to bring in top artists to the story.
There’s a whole bunch of things Booktrack can do. Publishers like it because it lets them reach new audiences. It lets them reinvigorate their back catalogues – they can take an older title and rerelease it with a Booktrack soundtrack. It’s an excuse for the reader to reread the book, and an opportunity for the publisher to find a new audience. It’s creating new revenue stream for them.
So how big is the Booktrack team now?
We’re about 25. We’ve got offices in New Zealand, our business development team is run out of San Francisco and marketing in Toronto.
You’ve got 15,000 titles and 2.5 million users, but is the company profitable yet? Or is that still part of the timeline you’re working towards?
We’re still working towards that. The thing is, our business could change very rapidly. If we released a blockbuster title – a Twilight or one of the Harry Potter titles – that would be enormous for us, and this is all stuff that will happen in due course. But that’s just one of many things were doing around the business, but it’s one of many things. It’s not a sole focus.
Now that we’ve got this fuel in the tank, we just want to focus on growing the business: getting the acquisition aspects right, the marketing right and then backing all that up. We’ve got opportunities opening up all around the world, so now we’ve just got to execute it.
There’s a certain bit of criticism, or snobbery some would say, from many adult readers about Booktrack, but I think everyone agrees that, for kids, it’s a great tool. Have you guys got a good relationship with educators?
Ask any teacher: getting kids focused on creative writing is hard. We’ve had teachers who’ve said ‘we’re going to be studying this book and it’s got a Booktrack soundtrack’, and it’s worked out great, so that’s good, but we’ve also heard from teachers who’ve said ‘we’re studying this book and you’re all going to take a chapter and create a Booktrack soundtrack for it’. And the results from that have been amazing. We can see the data on that and these kids are spending hours and hours creating these soundtracks. It’s a fantastic engagement tool.
Ask teachers. They say there’s been no innovation in reading and writing at all. But we’ve launched Booktrack Classroom, that’s a dedicated platform for schools, and now that’s used by 12,000 classrooms around the world.
We’ve had two studies done on Booktrack, one in New York and one in Auckland. The Auckland one showed that kids had a nearly 20% increase in their comprehension, and also spent significantly more time reading when they used Booktrack.
The classroom is a great opportunity for us to re-engage kids with reading in a why that’s modern and fun, and also increases comprehension and retention.
Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription, an Idealog t-shirt and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).