Just how much longer can US and UK publishers continue to look the other way as investors respond to consumer demand and throw ever more money at the unlimited subscription model?
Nextory keeps a tight rein on its proprietary data and as TNPS has noted on more than one occasion, its booming percentage results tell us only the direction the company is moving in, not how it compares to rivals in the field.
Most recently I raised this issue when the Q3 results were declared:
But behind the scenes Nextory CEO Shadi Bitar has yet again been dazzling investors with the real numbers and, more importantly the potential numbers.
It was only in March of this year that Nextory picked up $6 million in new funding, and few would have bet on another finding round this year.
But one quick pandemic later and history repeats itself, only on a grander scale, and SEK 165 million ($20 million) of new funding has just landed in the Nextory bank account to consolidate gains and expand further.
In a press release Bitar said:
Nextory has continued to grow strongly in 2020 and we have exceeded several of our goals during the year. We have fantastic growth in our various markets, but it takes capital to grow and therefore we chose to replenish the coffers again. The new capital will primarily be used to scale up our global expansion, but also for development and innovation in the service.
Repeating its claims to be the fastest-growing subscription service in Sweden, Nextory CFO Johan Simberg said,
We have seen a lot of interest from investors and the round was quickly oversubscribed. Nextory is a significant engine in the digital transformation of the book market, both in Sweden and globally. Our focus on being the absolute best book app for families has proven to be just right, especially in these times.
The new cash, said Bitar, will,
Primarily be used to scale up our global expansion, but also for development and innovation in the service.
Nextory will be launching in the Netherlands next month and had already announced plans to restructure the company to attract new funding.
What’s important to understand here is that while Nextory is a Swedish streaming service, it is the international expansion plans that are attracting the funds, as investors search out new opportunities in the digital publishing arena – a process given added impetus in the era of Covid-19.
Back in October I speculated on where Nextory might head once its next funding round came in. That that happened so soon is a surprise, and the amount too raises eyebrows, but my commentary from October remains sound.
Any player wanting to get a foothold in the emerging digital book markets is likely to consider Nextory before Storytel or BookBeat, and with a serious influx of cash Bitar could yet surprise us all.
But the big surprise would be were Bitar to step outside Storytel’s shadow and do something seriously innovative in the global arena.
Sweden, Finland, Denmark, Germany… These were all markets prepared by Storytel. Austria and Switzerland are not meaningful new territory in that they rely on content already available for the German market.
Further expansion into west Europe – Italy and Spain, for example, and the long-awaited Norway launch – will bring nothing new to the table. In Latin America, SE Asia and the Middle East Storytel leads the way.
What would be impressive – and exciting – is if Bitar were to step outside the Storytel comfort blanket and focus on, for example, Eastern Europe (where Storytel is so far only in Poland), South Asia (where Storytel is so far only in India) and the virgin territories of Central Asia and Africa (especially South Africa, Nigeria and Ghana) where competition is sparse and opportunities abound.
With $20 million in fresh cash in its coffers, it will be interesting to see how much Bitar veers from such an outline strategy.
But the bigger question of course is just how much longer US, UK publishers can continue to look the other way as investors respond to consumer demand and throw ever more money at the unlimited subscription model.