Scribd announced today that they had raised $22 million in capital. The round was led by Khosla Ventures, and Khosla partner Keith Rabois will be joining the Scribd board as an observer.
Launched in 2007, Scribd has raised around $48 million in capital (including the $22 million mentioned today). According to Crunchbase, the last round of funding was in 2011 when Scribd raised $11 million.
Scribd opened its doors as a document hosting service but shifted its focus in 2013 with the launch of a new ebook subscription service. For $9 a month subscribers can read as many titles as they like from a catalog of around 600,000 ebook and audiobook titles from publishers including HMH, S&S, and HarperCollins.
Scribd isn't saying how many subscribers they have, just that the number of subscribers has been growing an average of 31% each month since the ebook service officially launched in October 2013.
Curiously, that growth isn't reflected in Scribd's userbase. They're still saying that they have 80 million monthly users. Or to be more exact, Khosla partner Keith Rabois
Scribd CEO Trip Adler is quoted by Techcrunch as saying that "With over 80 million users in nearly every country, the Scribd team is well positioned to grow to a massive global audience".
That quote caught my attention this morning because Scribd was using that 80 million users statistic when they launched the ebook service in 2013. This suggests that Scribd isn't growing their userbase but is rather converting free users to paid users.
That's good news, and it is probably the reason that VCs are happy enough with Scribd's growth that they invested in a new funding round. The cost of maintaining a free userbase can be prohibitive, and there are many services which get by with only a single digit percentage of users paying for the service.
So what does this mean for the ebook subscription service?
I'm not sure. Scribd isn't talking to me, but even if they were I doubt they would share this level of detail anyway. But we do know that the only subscription that Scribd is pitching on their website is for the ebook service so it's not like they picked up new paid users for a pro document hosting plan (I can't see any sign that they even offer one).
It's my guess that Scribd is turning at least some casual visitors into subscribers each month. What this means in the long term is uncertain, but if enough of the new subscribers are only casual book readers and not hard core readers then it's great news for Scribd's medium term viability, and for the viability of the subscription ebook market.
image by m_shipp22