Subscription-Based Interactive Storybooks Service Speakaboos Raises $6.2M In Seed & Series A Funding
Speakaboos, an ed-tech startup offering a subscription based service for children’s interactive storybooks, is today disclosing its seed and Series A funding totaling $6.2 million from New York-based digital media venture development platform MEDIA initially, followed by Shari Redstone’s (Vice Chairman of the Board of CBS & Viacom)’s Advancit Capital; Korean education company Kyowon Group; Gerald Hughes (former President & COO of Houghton Mifflin Harcourt); and Rick Segal (Managing Director of ReThink Education).
The company, originally launched to the web in 2009, was first incubated by Media, a company-building firm which both invests and develops startups, leveraging their close ties to nearby New York media companies. Speakaboos is the third company to arrive out of Media, which is best known for Saavn, the “Spotify for India” which has more recently expanded to other Western and Asian markets.
Explains Media’s founding partner Neal Shenoy, his firm typically invests the first $2 to $3 million in a business, and establishes one its partners as the founding CEO. When the company reaches the A round phase, other outside investors are then invited in. In the case of Speakaboos, Media put in $2 million in a convertible note, then closed a Series A in early 2012, which was extended just a few months ago.
The company also recently released its iPad application just over a month ago, with plans to arrive on Android in September.
You can think of Speakaboos as something of a Netflix for children’s e-books, in the sense that its business model is subscription-based, where parents pay either $5 per month or $45 per year to access to an entire catalog of books. Today, this catalog includes around 150 books from over 15 publishers, including big names like The Jim Henson Company, Pearson, Dr. Seuss, Penguin, Charlesbridge, Abrams, and others, as well as independent authors. And, says Shenoy, the catalog is now growing at a rate of around 1 to 2 books per week.
The company licenses the content from publishers, then translates it into interactive storybooks, which children can access through one of three age-appropriate tiers. For littler kids, there’s a lean-back “read to me” mode with animation and narration. Older children can graduate to narrated, interactive books, then to interactive books they read to themselves.
What makes the company interesting is the quality of the team it assembled, whose background includes extensive experience in the children’s education space, including time spent with Nick Jr., PBS Kids, Scholastic, and HIT Entertainment.
For example, Dr. Alice Wilder, Speakaboos’ Chief Content Officer, is known best as co-producer and head of testing for Blue’s Clues, and co-creator of Super Why. Her work was with Blue’s Clues also referenced in Malcom Gladwell’s “The Tipping Point,” which detailed why the Blue’s Clues TV show was so “sticky” with kids. Researchers believed comprehension and attention were strongly connected, and so they designed the show to increase attention through participation, verbal and visual clues, camera techniques, and more.
Similar ideas are implemented in the interactive storybooks on Speakaboos, which are extensively tested before inclusion in the service. As the narration proceeds, words are highlighted, corresponding to the actions that take place on the screen, and when they become animated and how they appear. Children can’t interact with the content until after the narration ends, allowing them to focus instead on the reading comprehension.
“The tremendous comprehension-based alignment between written word, spoken word, images, and animation, and the fact that every single interaction you see with Speakaboos stories has some type of plot-driven, comprehension-driven purpose – that’s why we’re seeing great engagement numbers and great comprehension numbers,” says Shenoy.
Meanwhile, as a low-cost subscription, the company hopes to appeal to parents looking for an expanded selection of interactive books, rather than having to buy these as standalone apps, often sold for several dollars apiece.
The results so far have seen children using Speakaboos completing 40 storybooks per month on average, spending close to 3 hours reading, and are completing over 85 percent of opened books. Meanwhile, 75 percent of parents and schools subscribing to Speakaboos retain their subscriptions after 12 months. (Schools can license Speakaboos for varying rates depending on size, up to $2,500/year).
To date, the company has sold (or pre-sold) over 10,000 subscriptions, and is now, as the investment indicates, working with edtech companies like Kyowan Group, which wants to bundle Speakaboos’ subscriptions with their own offerings – a reach of 1.5 million customers.
Speakaboos is available for iPad here on the iTunes App Store.
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