AI-Powered Self-Publishing Platform Inkitt Raises $37 Million
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Self-publishing platform Inkitt has recently secured $37 million in funding, led by Khosla Ventures, bringing its total valuation to $400 million. The platform aims to leverage artificial intelligence (AI) to turn user-created stories into bestsellers, with the goal of building a 21st-century 'Disney'.
Inkitt's app allows users to self-publish stories, which are then analyzed by AI and data science to identify the most compelling works. These stories are refined and distributed through its second app, Galatea. To date, the company has attracted 33 million users and produced dozens of bestsellers.
The new funding will primarily be used to expand content production, including using AI to generate stories based on user ideas, creating personalized versions of novels for specific readers, entering the gaming and audiobook markets, and producing more human-made video content from published novels—with plans to eventually transition to AI-generated content. Company founder and CEO Ali Albazaz stated that the long-term vision is to expand the content library and build a multimedia empire upon it, not just competing with Wattpad but aiming to become the 'Disney of the 21st century'.
This funding round, led by Vinod Khosla of Khosla Ventures, brings Inkitt's total funding to $117 million. On this basis, the company has already received acquisition offers from at least one publisher.
Inkitt's strategy goes against the trend of the traditional publishing industry. With the rise of mobile phones and apps, reading has been on a decline over the past two decades. However, Inkitt challenges this trend by offering books in more innovative ways, such as creating shorter, mobile-friendly chapters and introducing various effects within the text to make the reading experience more dynamic. Beyond using A/B testing to tailor books to reader preferences, Inkitt has accumulated extensive data on novel performance by analyzing elements like titles, plotlines, opening sentences, and cliffhangers, which are immediately applied to subsequent publications.
These strategies appear successful. Unlike some services that flourished during the COVID-19 pandemic, Inkitt and its related products Galatea and Galatea TV have continued to attract users in recent years, with reading time consistently increasing. The company claims to have surpassed renowned brands like Penguin Random House in global bestseller rankings, asserting its algorithms yield 20 times higher success rates for publishing bestsellers compared to traditional publishers.
Although focused on fiction, the company doesn't target literary fiction. It prefers avoiding collaborations with famous authors, instead concentrating on undiscovered talent. Albazaz stated plans to further expand the business through AI-generated stories and personalized narratives, experimenting with customization that may even give readers control over content. To realize this vision, Inkitt has experimented with various large language models (LLMs) for narrative construction, including APIs from OpenAI, Anthropic, and Mistral AI. Each book is automatically published in 10 languages, with DeepL serving as the primary AI for translation. The company also uses ElevenLabs' text-to-speech voice generator to produce audiobooks, and recently switched from Midjourney to Leonardo for cover art to achieve the best triangulation strategy for optimal results.
Albazaz emphasizes that these large language models alone cannot create best-selling content; rather, it's achieved through the data the company has accumulated over the years. Additionally, to avoid excessive reliance on any single large language model, Inkitt intentionally uses some flat prompts to prevent transmitting information about the company's best works to these models. Despite navigating the challenging path of staying afloat, Inkitt has found opportunities in building an AI-powered content empire. Vinod Khosla believes that future entertainment will be highly personalized and thus chose to support Inkitt, confident that it is creating hyper-personalized and meaningful story content. Vinod himself declined an interview but provided a statement: "With the advent of AI, entertainment will become rich, diverse, and personalized. Inkitt is achieving this through stories, creating content that is hyper-personalized and meaningful for everyone."