Canadian story-sharing platform Wattpad closed a funding round of $51 million led by Chinese internet giant Tencent Holdings Ltd. (TCEHY.PK) that will be used to expand the company’s global entertainment effort, increase machine-learning activities and hire more workers.
The round values Wattpad at about $400 million, according to people familiar with the matter. Other investors include the Business Development Bank of Canada, Philippines-based Globe Telecom Inc.’s subsidiary Kickstart Ventures, Hong Kong-based Peterson Group and existing investor Raine Ventures LLC, the company said.
The Toronto-based startup said it has 65 million users who write and share stories around the world, according to a statement from the company. To date, Wattpad said it has raised $118 million from investors across Asia, the U.S. and Canada including OMERS Ventures Management Inc., Khosla Ventures LLC and August Capital Corp.
“Entertainment is in a period of disruption, and how people find and experience stories is evolving,” Wattpad Chief Executive Officer Allen Lau said in the statement. “This new funding from Tencent and our other investors shows that confidence in our vision is growing alongside our revenue, our success and our community.”
Tencent invested in several other Canadian companies last year, including taking part in a $102 million funding round for Montreal-based Element AI Inc. and investing $28 million in Kindred Systems, an AI robot-manufacturing startup based in Toronto. The Chinese giant also invested in Kik, the Canadian instant messaging startup, in 2015.
“Wattpad has built a creative community for storytellers and story lovers,” said Tencent’s President Martin Lau in a statement. “The company is providing opportunities to new and established writers, transforming how entertainment is discovered and produced.”
Wattpad has also set up a production studio to turn its stories into movies and TV shows. The company is a partner with Universal Cable Productions, a division of NBCUniversal Cable Entertainment, Entertainment One Ltd., CW Network LLC’s digital network CW Seed, and works with publishing houses. Stories on the platform have been published as best-seller books and others have been adapted or licensed for film or TV.