Jessica Ewing and Kelly Carroll have raised a hefty funding round for their company, a subscription service for children's books that points to the future of the Austin economy — seriously.
Literati Inc. announced Oct. 23 a $12 million series A funding round led by Nikhil Basu Trivedi of Shasta Ventures, a Silicon Valley-based investment firm that helped propel Dollar Shave Club and Nest Labs to fame. The valuation was not disclosed.
Literati is part consumer-focused technology company, part digital-focused book distributor. It sells a monthly subscription for $9.95 that gives parents five children's books every month, which they can try out for a week with their kids. After that, they send back the ones they don't want and pay for the ones they want to keep.
Ewing and Carroll founded Literarti in 2016. Ewing, who is CEO, declined to discuss many of the company's financial metrics, but she said its subscribers and revenue have grown tenfold since the company raised a $2.3 million seed round in late 2017.
She said the $12 million will be spent on "new product lines" and to hire in Austin.
Literarti has now raised about $15.3 million to date, according to Ewing. It has about 40 employees, split nearly evenly between a warehouse in Southeast Austin and its corporate headquarters.
Also contributing to the series A round were Dick Costolo of 01 Advisors, who was CEO of Twitter from 2010 to 2015; returning investor Silverton Partners, an Austin-based venture capital firm; Dan Graham through Austin-based Springdale Ventures; and Craig Cummings of Austin-based investment firm Moonshots Capital.
Other investors were Eventbrite founder Kevin Hartz; Thomas Lehrman, co-founder of professional learning company Gerson Lehrman Group; Allan Hubbard, former director of the National Economic Council; returning investor Founders Fund; Katie Stanton and Jessica Verilli of VC firm #Angels, and Brent Montgomery at Wheelhouse, a company backed by comedian and TV personality Jimmy Kimmel.
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