In news reminiscent of more cash-happy times, iUniverse has announced an $18-million round of funding from equity investor Warburg Pincus. The company will use the money to hone infrastructure and bolster marketing.
The iUniverse strategy, company officials said, will continue to comprise a number of strands. It will enable the packaging and distribution of corporate documents; provide publishing services to authors (iUniverse currently has about 8,500 titles signed up); and sell books to the public. It will leave the marketing of those books to the authors.
While iUniverse has yet to score many mainstream bestsellers, president Doug Bennett said that doesn't present a problem. "In traditional publishing, 20% of titles generate 80% of revenues," he explained. "With our model, we don't necessarily have the same risk."
In strengthening Warburg's stake in the company, the investment dilutes Barnes & Noble's share, estimated at 29% prior to the investment. Nevertheless, iUniverse will continue to try to use its Barnes & Noble connections to appeal to more authors as well as customers. "I wouldn't expect any endcaps soon," Bennett said, "but I would say that with this new funding, they [B&N] are actually going to take a larger role in the opportunities we have for our authors and a bigger role in a national distribution program." Among the expected announcements, according to general manager of author services Lynn Zigraf, was the placing of pamphlets to recruit new authors in B&N stores. The company already has a program in place wherein select authors work with Barnes & Noble customer relations managers to organize readings (News, June 25).
iUniverse said it has sold 750,000 units since it was founded as ToExcel in 1998. Such high numbers may be keeping the company in the pool at a time when many have jumped out. It lost an estimated $2.5 million in the second quarter, a third of which came out of B&N's pockets, and a slightly lower amount than it lost in the second quarter of 2000.