Literati is an Austin-based children’s book club offering a monthly subscription service of curated books for children 12 and under. Founded by Jessica Ewing and Kelly Carroll in 2016, the company says it’s seen “10x growth in 18 months,” and to continue growing, it’s raised $12 million in a Series A round led by Nikhil Basu Trivedi, managing director of Shasta Ventures.
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For $9.95 per month, Literati curates a box of books based on age along with custom artwork and personalized book labels. Readers have seven days to try out the books and buy those they want to keep. Customers can send back any books they no longer want via a prepaid return box, and Literati will donate them. The company says it’s donated more than 18,000 books to charities so far in 2019.
A slew of other investors participated in the financing, including Dick Costolo of 01 Advisors (and former Twitter CEO), as well as Katie Jacobs Stanton and Jessica Verilli, founding partners of #Angels, Dan Graham of Austin’s Springdale Ventures, Eventbrite founder Kevin Hartz, GLG founder Thomas Lehrman, Allan Hubbard (former director of the National Economic Council) and follow-on investments from Founders Fund Pathfinder and Silverton Partners. Literati also received funding from Brent Montgomery at Wheelhouse, which is backed by comedian and late-night host Jimmy Kimmel.
In a press release, Literati says it will use its new capital to “strategically grow the business and also hire new talent in Austin.”
“Our mission is to build a lasting company that stands for lifelong learning and sparks revolutionary excitement in books and literature,” Ewing said in a statement. “We want to build consumer products that make life more meaningful, not merely more efficient.”
The company points to research indicating that providing a steady stream of new age-appropriate books has been shown to nearly triple interest in reading within months.
I reached out to the company for more specifics around growth and a spokeswoman told me via email: “We aren’t releasing specific subscriber and revenue numbers, but because subscriber growth and revenue go hand in hand in the subscription business, Literati has grown 10x between our last Seed Round and this Series A.” She added that headcount is currently 40, up from about 10 one year ago.
Investors Weigh In
Trivedi said he’d been looking for the “next great consumer subscription business.” In the past, he’d invested in Dollar Shave Club (which was acquired by Unilever for $1 billion in 2016), Imperfect Foods and The Farmer’s Dog.
“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,” said Trivedi, who is joining Literati’s board as part of the funding.
Meanwhile, Costolo pointed to Literati as “a shining example” of “the innovative new companies that are being built outside of Silicon Valley.” (Read more here about how Austin is becoming a growing tech hub).
He added: “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.”
Springdale Ventures invested in Literati, according to Graham, because of its “amazing founder team, game-changing vision for publishing and book purchasing, exciting product roadmap, growth to date, and incredible unit economics.”
Blog Roll Illustration: Li-Anne Dias