Los Angeles-based Livrada, the startup that lets users redeem a specific ebook title from a gift card, announced today that it has closed a $1 million seed funding round led by ICG Ventures, the investment arm of book distributor Ingram Content Group, and other angel and private investors. In addition to its ebook-specific gift cards, currently sold at Target and redeemable on Kindle, Nook, and Kobo, the company also announced the launch of a new product platform it calls e-Book Cards for authors, which lets authors hand out or sell gift cards for their books at book signings, launches, and while meeting with publishers and publicists.
The funding will be used for the new platform, as well as for expanding to new retailers (it first launched in stores in July 2012). “When we first launched…we thought that there’s a strong culture around gift-giving in books that had been lost in ebooks,” said co-founder and CEO Leonard Chen in an interview. “But, we found that authors started reaching out to us…in the world of ebooks, when they go around and have events…giving books to promoters, publishers, agents and the like, there’s no efficient way to do that with ebooks.”
The startup will now work with primarily self-published authors to create cards which they can distribute and sell at their events, similar to authors with a table of physical books to sell at a reading, which readers can redeem on the platform of their choice. It has also been approached by large corporations and organizations who want to use the startup’s services to give out ebooks as part of large employee and corporate events.
Though Chen did not disclose the specifics of the company’s business model, he said the company charges publishers a marketing fee and makes affiliate revenue from the books it helps sell, in addition to a service fee it will now be charging for its new author platform. It is also in talks with several different retail partners for possible distribution channels which the company will announce at a later date, however, Chen hinted that it would involve retailers more specific to the book selling industry, rather than more general retailers like Target.
There are other companies like Canadian startup Enthrill in the title-specific ebook gift card market, and retail-specific gift cards from Amazon or Apple’s iBookstore that pose a threat to Livrada. However, the company’s focus on making the redemption process as seamless as possible, emphasis on title-specific over generic gift cards and now product extensions into the realm of authors and corporations are what it believes will allow it to thrive in the long run.
“Starting out with one product, we found that we’re solving other problems in the whole ecosystem of authors, publishers and ebooks, and we’re the only ones that can fulfill directly through multiple platforms,” Chen added. “My background is in the music industry so I have empathy for content owners and content creators and we’re hopeful what we’re building will bring a lot of value to everyone, starting with the authors.”
With the seed funding secured and focus on spinning out from its original value proposition to serve additional players in the market, Livrada is poised to help readers gift ebooks, while giving authors a new marketing channel. Whether Livrada gift cards will replace a table of physical books at book signings across the U.S. remains to be seen, but it could be a viable way for authors to get their books on digital bookshelves.