Readly looks to raise capital via private funding or IPO – CEO

04 April 2020

  • Could look at Stockholm for IPO
  • Does not see negative impact from coronavirus
  • March downloads rise 60% yoy

Readly, a Swedish all-you-can-read magazine app, plans to raise capital via a private funding round or an IPO, CEO Maria Hedengren told Mergermarket.
 
She declined to give details on the timeline for the fundraise or the potential available stake size, but said the company wants to continue growing fast and enter new markets.
 
Readly is not yet profitable and does not plan to be for another couple of years as it prioritises growth over short-term profitability, Hedengren said. The company reported EUR 19.3m FY18 revenue, up 54% from the previous year. She declined to comment on the company’s FY19 figures, which are yet to be published.
 
Although she declined to give details on the possible funding options, she said that Stockholm as its home market would be a natural choice for a potential IPO.
 
Readly raised EUR 15m in a Series C round last year, led by the Third Swedish National Pension Fund (AP3). In total, the company has raised EUR 44.3m across six rounds, according to Crunchbase.
 
ABG Sundal Collier advised Readly on the last funding round and the company could use them again for the next raise or IPO, Hedengren said. DLA Piper and Baker Mckenzie provided legal advice in the last funding round, she added. In its Series B round in 2017, Readly was advised by Stella Advisors (since known as Stella EOC and now part of GCA Altium).
 
Readly has not experienced any negative impact from the coronavirus crisis on its business, however it has seen apps and digital services are booming particularly in countries under lockdown measures, Hedengren said.
 
In March, Readly’s app downloads were up 60% YoY and 21% compared to February, she said. Apart from implementing a work from home policy for its near 100 staff, the company has not had to change its plans in any way, she added.
 
Zouk Capital is the majority shareholder with a little over 30% of the shares, she said. Founder Joel Wikell is the second largest shareholder, while Swedbank Robur and AP3 are third and fourth, respectively, Hedengren said, without elaborating. She is not aware of any of the shareholders looking to exit in the near term.
 
The company is focussed on organic growth, but also looks at M&A opportunities on a case by case basis, she said. It has no active plans or discussions for M&A, she added. If a future M&A opportunity does arise it is likely to acquire a company for its technology rather than resources or skills, she noted.
 
Readly wants to enter new markets and has several on its watchlist, she said, declining to name the markets or give a timeline. A possible market entry depends on various factors including language, content synergies, and the digital behaviour of consumers in the market, she added.
 
Its largest markets are Germany, Sweden and the UK, Hedengren said. It most recently launched in Australia and New Zealand and is also present in the US, she said. The company is looking to strengthen its non-European operations, she added.

Its main competitor is the time that consumers share across different platforms, Hedengren said. Apple recently entered the space by launching Apple News+ but it doesn’t have the same amount of content as Readly and is only available in English, she said. While there are some other all-you-can-read apps in Europe, they do not have the same reach, geographical coverage or amount of content, she said.

 
The company shares more than 50% of revenue with publishers, also sharing data from its 25bn-datapoint database (including such as readers behaviour on the platform, profile etc.), and allows publishers to collect readership statistics, she said. The app calculates how long subscribers spend on each title, paying publishers accordingly, she said.
 
The company is currently present in 11 countries, although subscribers can access the app and all content from anywhere in the world. Hedengren declined to say how many subscribers the company has but said they come from approximately 50 countries. It has almost 5,000 titles and 16 languages.
 
Readly was launched in 2013. It has offices in Växjö and Stockholm in Sweden, as well as branches in Berlin and London.
 

by Auri Aittokallio in London