UK-based Graphite Capital has acquired Wonderbly, the nine-year-old “world’s leading on-demand publishing platform for personalised children’s books”. The publisher – which is active in 150 countries and sold more than 1million books in 2020 – has grown revenue by more than 20% for the past three years, to £30million in 2021. It is believed to have been acquired on a valuation of more than £60million.
Wonderbly is a publishing phenomenon. Having built a Facebook audience of 1.7million and sold more than 4million books worldwide – and all from a standing start in 2012, with no connections in publishing. The founders have said: “We began as a product rather than a company. It was a side project between friends that took off in many wonderful ways. We started to understand the impact we were having, based on the amazing feedback…and realised what we had was so much more than a book.”
The private equity buyer said: “Wonderbly operates in a large and fast-growing sector. The global personalised gif ting market is worth £19bn and is growing at 9% annually. The market for personalised children’s books is also growing rapidly, with consumers increasingly seeking unique educational gifts for children.”
The company’s first book sold 133,000 copies in the UK in 2014 – and a total of 325,000 worldwide. Sales of that book now exceed 3million. It won ‘Children’s Publisher of the Year’ at this year’s British Book Awards.
At the heart of Wonderbly’s success is its integrated approach to creating, selling and making its books, using proprietary software that enables it to render personalised images and manage orders from customers across the world with short delivery times. It also has a worldwide network of on-demand printers, creating a scalable global model – with no inventory. Almost the holy grail of book publishing.
It is said to be in the “early stages” of expanding its technology reach to develop and market personalised products for a number of blue-chip third-party clients, including Warner Bros and Universal. During the sale negotiations this year, the company registered Wonderbly Productions Ltd to engage in “television programme production activities”.
Two years ago, The UK’s Bookseller magazine (which has described Wonderbly as “a frontrunner among a new breed of publishers driven by technology and innovation”) said: “Asi Sharabi <CEO> and his co-founders launched Wonderbly in 2012 as a lean start-up (the company was then called Lost My Name, after its first picture-book). He and his team built an online engine to create a multi-page, print-on-demand title based on the letters in a child’s name, with the creative and storytelling designed in-house and the books sold direct through its website. The ease of the interface and quality of the product quickly found an audience—in 2014, it shifted 133,000 units of Lost My Name in the UK, outselling the top traditionally-published picture book that year, Julia Donaldson and Axel Scheffler’s Superworm, by some 15,000 copies.
“That success attracted more than $18million in venture capital funding, with investors including Google Ventures and the German game and toymaker Ravensburger. Sharabi and co-founder David Cadji-Newby also appeared on the popular BBC show “Dragons’ Den” in which people pitch their businesses to investors. They secured £100,000 and also gained a huge amount of publicity. That war chest enabled expansion, with the list now up to 16 personalised books, including My Golden Ticket, a customised version of Charlie and the Chocolate Factory created in partnership with the Roald Dahl Estate (the growing range was part of the reason for the 2017 name change to its current amalgamation of “wonderful” and “impossibly”). There has been international expansion too, with the books now available in 11 languages; its titles have been sold, Wonderbly says, into 200 countries”. (The Bookseller)
In the 12 months to 31 May 2020, Wonderbly increased revenue by 23% to £26.1million (2019: £21.2million). Operating profit almost trebled to £2.9million (£1million). New launches during the year accounted for 31% of the revenue. Notably, for a UK publisher, only 15% of revenue came from the domestic market, 23% from Rest of Europe, and 62% from the rest of the world, principally the US. It is believed that, in 2020-21, revenue increased to more than £30million.
This week’s deal may yet make a role model of Wonderbly CEO Asi Sharabi who considers himself an unlikely startup success. In 2017 (after he had just secured funding from a glittering array of investors) he told a London conference he had rarely read about how flawed business founders could be: “As a first-time founder, I feel like I woke up one morning to find I have a board [of directors], investors and 80 people to manage – and I don’t have a fucking clue how to do it.” Now he does.
