Bookclubs has secured $2 million in new funding to add a paid subscription model to its platform, which is used for creating and managing book clubs.
Co-founder and CEO Anna Ford said “a Richmond-based institutional fund” led the round. She declined to name the fund, but said the round was a mixture of angel and institutional investors. Farmington, Massachusetts-based Sincere Corp. was also one of the participants.
Ford said the round was completed several months ago, but the company waited to make the announcement. One of the key additions is Matt Douglas, the founder and CEO of Sincere Corp., who took a seat on the board. The round marked the first time Bookclubs has added an investor to its board. Ajay Kori, founder of D.C.-based flower delivery company UrbanStems, Ford and Ian Campbell, another Bookclubs co-founder, now constitute the company's board along with Douglas.
The platform has more 500,000 members and thousands of different clubs. Clubs can be online or in person. Bookclubs has previously earned revenue through partnerships with book publishers. The company would receive money when it recommended certain books, or a club purchased a book through a promotion.
Ford said the latest funding round will take the company in a new direction with a subscription model. With a subscription, club organizers can unlock additional services and benefits. Subscriptions will cost between $50 and $200 a year.
“This is a new frontier for Bookclubs,” Ford said. “We are launching a premium subscription product.”
Douglas is expected to help the company implement the subscription model. He has extensive experience building startup subscription products. Sincere is behind online greeting card and invitation company Punchbowl, digital photo organizer Timehop and video message company Memento.
“Matt adds tremendous value in his expertise in launching and running companies with subscription products,” Ford said.
The company did a lot of user research before pursuing a subscription model, Ford said. Company officials talked to users and found out that many were interested in a greater variety of services than the company offered — and they said they were willing to pay for them.
Ford said subscription fees are based on the types of services and not the number of members in a club. The service will function like Meetup, where the club organizer pays the fee and manages the club. A free service will still be offered.
Ford declined to give overall revenue numbers but said the company has seen a significant increase in the user base over the last year. She also said the number of people who downloaded the app has doubled over the last year.
Ford said a subscription model is the best way forward for the company, giving it a clearer path to profitability.
“We are still early in our journey to monetization,” Ford said.
According to Crunchbase, the current funding round is the fourth for Bookclubs. The company raised $1.07 million last year, which involved seven previous investors.
The company participated in the Lighthouse Labs accelerator and Startup Virginia incubator programs. Nancy Brown, the company's other co-founder, is based in Richmond and it has other employees in the region as well as across the country. Ford is based in Maine.
