Less than two years after its first funding announcement and less than six months from its public launch, ebook subscription service Oyster has raised $14 million in funding in a Series A round from a consortium of venture-capital investors, led by Highland Capital Partners.
New York-based Oyster has ten employees currently and plans to use the money to scale its product and team, a spokesperson told Digital Book World, adding that Oyster plans on releasing an Android app in 2014.
While HarperCollins, Perseus and several mid-size publishers have signed on to supply Oyster with ebooks, other publishers remain wary of subscription services, even while investigating their viability.
“Is it a sustainable model? Will it cannibalize your existing business? I don’t think these things are able to be answered yet,” said Simon & Schuster CEO Carolyn Reidy, speaking at the Digital Book World 2014 conference. She added that subscription services could “cannibalize” in a positive way. Simon & Schuster is not currently distributing through Oyster but is working with rival service Entitle.
Other publishers, like F+W Media and O’Reilly, both represented on stage at Digital Book World by their respective CEOs, are more bullish.
“Anyone not looking at subscription models is foolish,” said O’Reilly CEO Tim O’Reilly. “First of all, recurring revenue businesses are great. Secondly, there’s pretty clear evidence in many fields that it’s what customers want.”
F+W Media has a large video subscription business and O’Reilly has a large stake in Safari Books Online, a large technical and professional ebook subscription service.
Today, Oyster announced its latest round of funding, raising 14 million dollars lead by Highland Capital Partners, and including participation from existing investor Founders Fund (led by Peter Thiel).
(As you know) Oyster, launched in Sept. 2013, offers unlimited access to over 100,000 books for one low price of $9.95 per month. Oyster works with hundreds of renowned publishers including HarperCollins, Houghton Mifflin Harcourt, Rodale, Workman, Perseus, and Melville House, among many others. The app is currently available on iOS devices including iPhone, iPad and iPod touch.
With its rapidly growing user base, this announcement signifies Oyster’s commitment to delivering the best product for readers. To keep up with consumer demand, Oyster will use this latest funding to scale the team and product.