If you thought the days of stylish glossy magazines were over think again. They aren’t, they just moved online.
And as magazine building SaaS platform Styla has shown, the sector is also a magnet for investment.
The Berlin-based startup has just completed a €2.5m seed funding round, led by Redalpine Venture Partners.
The business had already won investment from prominent VCs and angel investors; its innovative technology recognised as the first to fully automate the process of creating beautiful print-style magazines online.
Launched in 2012 by entrepreneurs Philipp Rogge and Franz Riedl, Styla’s layout engine does not require any design, formatting, or development work. The system allows anyone to create an online magazine in minutes.
Rogge and Riedl had extensive digital and startup experience, having previously built companies in the web space. Creating Styla involved 18 months of building, testing and iterating on magazine creation.
“We built many prototypes tested them, threw them away, got back to building and then finally had a product that was good enough for launch. Our first client went live in January 2014,” says Rogge.
Today their client base totals 40.
The pair launched Styla softly as a B2C platform with the aim of getting bloggers to write in magazine instead of blog-style.
However, a few months into development they were approached by publishing and ecommerce clients requesting quotes for a white-labling of this software.
“It became clear to us very quickly, that instead of taking the risk of building an own community, we would win the market much quicker and monetise much faster by licensing our technology and shipping it out to businesses in a SaaS model,” explains Riedl.
The print-style online magazines sector is still entirely hand-crafted. In fact it is a very old traditional process that online or otherwise, hasn’t changed since the early origins of the magazine business.
A designer sits over an assortment of images, products and texts and uses a software tool, such as Photoshop or indesign, to arrange it in the most appealing and digestible way for the reader.
“At the moment no other platform serves content commerce as we do; we are a strong hybrid between magazine and online shop,” insists Rogge.
“Styla's market lead comes from its patent-pending layout technology and no other player has dared to take away layout ownership from editors, so there is no competitor in artificial intelligence for magazine design.”
Rather than requiring hours of input and design expertise, users simply upload text, images, and videos in Styla’s editor. The company’s algorithms then take over by automatically defining the design of collages, product spreads, and shop-the-look formats.
At the same time, Styla automatically integrates eCommerce capabilities into its editor, making all products displayed directly shoppable from within the magazine.
This, along with the magazine experience, leads to 36% higher sales conversion rates and increases customers’ average time on site to 4.5 minutes.
And in what is a sign of the startup’s market potential, Styla’s seed round was offered rather than pursued by the founders.
Reidl says: One of our existing investors Peter Schüpbach recommended us to one of his friends, Peter Niederhauser from Red Alpine. Another contact put us in touch with Groupe Arnault who then decided to co-invest. The same happened with Pentland who also joined in. We now have a team of ecommerce, brands and luxury fashion from three European markets to support us.”
What captivates ecommerce, retail and fashion companies are the huge opportunities that can be won in the dying print market. This shortcuts the entire system and pushes these brands into a publishing role that reflects their own premium positioning.
“I think this made it easier for us. Of course an established network of well-connected business angels is incredibly important and we are truly grateful that we have it,” he adds.
Styla has attracted some top names to its platform including Graziashop from Grazia magazine, German television network RTL Group, via its fashion site Blogwalk, and Rocket Internet companies Zalora and Lamoda.
In addition to the Redalpine funding, Styla’s investors include Groupe Arnault, the controlling shareholder of LVMH, which owns brands Louis Vuitton, Dior, and Fendi, and founding investor Atlantic Labs, lead by business Angel Christophe Maire, who believes that the firm, with its cutting-edge technology, has the potential to take the company all the way to the top of a multi-billion market.
Styla will use the funding to build its technological lead in the market, grow its sales and development teams, and accelerate its growth.
