Inkitt, a self-publishing platform with a bold vision, believes in using artificial intelligence (AI) to transform promising stories into bestsellers and build a multimedia empire around them. The company’s approach involves allowing users to self-publish stories on their app, then leveraging AI and data science to identify the most captivating ones for further development and distribution. These chosen stories are then refined and sold through a separate app called Galatea.
With 33 million users and numerous bestsellers under its belt, Inkitt has secured $37 million in Series C funding to fuel its ambitious plans. This funding will enable the company to:
Develop AI-powered story generation: Inkitt will explore using AI to craft stories based on user ideas, allowing readers to personalize their fiction experience.
Expand into new media: The company plans to venture into games, audiobooks, and video content adapted from its published works. These video adaptations, currently created with human input, will eventually incorporate AI technology as well.
CEO and founder Ali Albazaz envisions Inkitt as a “21st century Disney,” building a vast content library and leveraging it across various media formats. This approach stands in contrast to competitors like Wattpad, which focus primarily on text-based stories.
The $37 million Series C round, led by Vinod Khosla of Khosla Ventures, brings Inkitt’s total funding to $117 million. Despite the current climate of cautious investment, particularly in consumer-focused startups, Inkitt has already attracted interest for a potential future round. The company’s current valuation sits around $400 million post-money, demonstrating continued investor confidence.
Inkitt’s strategy takes a unique approach to the declining trend of reading in the mobile age. The company believes in captivating readers with innovative delivery methods, including shorter chapters optimized for mobile devices and the incorporation of multimedia elements like sounds to enhance the reading experience. Additionally, Inkitt utilizes A/B testing to refine every aspect of a story, from titles and plot lines to cliffhangers, gathering valuable data on reader preferences and optimizing future publications.
This data-driven approach seems to be paying off. Inkitt, Galatea, and the newly launched Galatea TV have all seen consistent growth in user engagement, even as services that boomed during the pandemic, like instant deliveries and online entertainment, have experienced slower growth or even decline.
Albazaz attributes this success to Inkitt’s ability to provide an escape for readers in today’s fast-paced world. He claims that Inkitt ranks as the 11th best-selling publisher globally, surpassing established names like Penguin Random House, thanks to its algorithms that boast a “20x” higher success rate in producing bestsellers compared to traditional publishers. Additionally, the company has doubled its revenue in the past year and is nearing profitability. While royalty details remain undisclosed, Albazaz claims they are higher than what traditional publishers typically offer to less established authors.
While Inkitt focuses on fiction, it intentionally avoids established authors and their “big egos,” preferring to cultivate and empower undiscovered talent. Looking forward, the company plans to delve deeper into AI-generated stories based on human-crafted concepts, alongside personalized narratives tailored through AI algorithms. This personalization remains a work in progress, with Inkitt experimenting with different degrees of changes to original works and even exploring the possibility of reader-driven modifications.
To achieve this vision, Inkitt utilizes a combination of various large language models (LLMs) for narrative construction, including OpenAI, Anthropic, and Mistral AI (currently favored for shorter passages). Additionally, DeepL handles automatic translation into 10 languages, ElevenLabs provides text-to-speech generation for audiobooks, and Leonardo creates cover art. This multi-pronged approach aims to optimize results through a diverse set of tools.
While acknowledging the limitations of LLMs in generating high-quality content on their own, Albazaz emphasizes that Inkitt’s data and expertise play a crucial role in transforming them into bestsellers. Furthermore, to mitigate intellectual property concerns, the company avoids relying solely on any single LLM for a complete novel and uses strategically crafted prompts to prevent the models from learning too much about their best-performing works.
Inkitt’s focus on building an AI-powered content empire resonated with lead investor Vinod Khosla, who believes the future of entertainment lies in hyper-personalization. Khosla emphasizes Inkitt’s success in creating “meaningful” and “hyper-personalized” content that caters to individual preferences.
With its innovative approach, Inkitt is poised to challenge the traditional publishing landscape and potentially redefine the entertainment industry in the age of AI. Whether it can truly deliver on its ambitious vision of becoming a 21st century Disney remains to be seen, but its journey promises to be an intriguing one to watch.
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