In the realm of storytelling, a visionary startup called Inkitt is on a quest to transform captivating tales into blockbuster hits, aiming to establish a modern-day “Disney” centered around compelling content. With a remarkable $37 million funding boost, Inkitt is poised to expand its horizons and redefine the entertainment landscape.
Inkitt’s innovative platform empowers aspiring writers to self-publish their stories, harnessing the power of AI and data science to identify the most promising works. These selected stories undergo meticulous refinement before being distributed and sold on Galatea, a dedicated app for readers to discover and enjoy these literary gems.
The company’s remarkable success is evident in its impressive user base of 33 million and a string of bestsellers that have captured the imagination of readers worldwide. The newly acquired funding, secured through a Series C round, will fuel Inkitt’s ambitious plans to diversify its content offerings.
Envisioning a future where AI collaborates with human creativity, Inkitt aims to introduce AI-generated stories based on original ideas, personalized fiction tailored to individual readers’ preferences, and an exciting foray into games, audiobooks, and video content adapted from its platform’s literary treasures.
CEO and founder Ali Albazaz envisions Inkitt as a multimedia empire, a 21st-century storytelling powerhouse akin to Disney, rather than a mere competitor to platforms like Wattpad. This grand vision has attracted the attention of renowned investors, including Vinod Khosla of Khosla Ventures, who led the Series C funding round. Previous supporters, such as NEA, Kleiner Perkins, Redalpine, and other undisclosed investors, also participated in this funding milestone.
Inkitt’s total funding now stands at an impressive $117 million, propelling the company’s valuation to approximately $400 million post-money. While the valuation has seen a modest increase since its Series B round, the current economic climate and the challenges faced by consumer-focused companies may have influenced a more conservative deal.
Inkitt’s aspirations stand in stark contrast to the prevailing trend of declining reading habits in the digital age. With the rise of mobile devices and apps vying for consumers’ attention, reading time has dwindled over the past two decades. Inkitt, however, is betting against this trend by embracing innovative approaches to deliver engaging reading experiences.
The company’s strategy revolves around shorter, mobile-friendly chapters, captivating effects like sounds integrated into the text, and a data-driven approach to tailoring books to readers’ tastes. Inkitt’s rigorous A/B testing across every aspect of a work, from titles to cliffhangers, yields valuable insights into reader preferences and informs subsequent book publications.
This innovative approach has paid off, with Inkitt, Galatea, and Galatea TV witnessing a surge in engagement time, even as other pandemic-era services have experienced a decline. Albazaz attributes this success to people’s desire for escapism in these post-pandemic years.
Inkitt’s remarkable achievements include ranking as the 11th best-selling publisher globally, surpassing established names like Penguin Random House. Albazaz credits the company’s algorithms for achieving a 20-fold higher success rate in publishing bestsellers compared to traditional publishers.
Revenues have doubled in the past year, and newer projects like Galatea TV are generating significant returns. A TV series based on the Galatea book “Beautiful Mistake” alone has generated an impressive $500,000 in revenue. Albazaz proudly declares that the company is nearing profitability.
Inkitt’s focus on undiscovered talent has led to a conscious decision to avoid working with established authors and their often-demanding egos. Instead, the company prefers to nurture the long tail of undiscovered talent, believing that these writers are more receptive to the guidance of AI algorithms.
In the future, Inkitt plans to delve deeper into AI-generated stories, crafted from compelling treatments by talented human writers. The company is also exploring personalized stories using AI algorithms, though this remains a work in progress.
To realize this vision, Inkitt is experimenting with various LLMs (Large Language Models), including APIs from OpenAI, Anthropic, and Mistral AI, to construct narratives. The company also utilizes DeepL for automatic translation into 10 languages, ElevenLabs for audiobook narration, and Leonardo for cover art.
Inkitt’s cautious approach to relying on a single LLM for an entire novel stems from concerns about intellectual property rights and the potential misuse of proprietary data. The company also employs intentionally flat prompts to prevent LLMs from learning too much about Inkitt’s best work.
Despite the challenges, Inkitt’s unique approach has resonated with investors, particularly Vinod Khosla, who believes in the future of hyper-personalized entertainment. Khosla sees Inkitt’s mission and success as a testament to the potential of AI in creating meaningful and personalized content for every individual.