Lekiosk, the French virtual newsstand app that lets readers subscribe to several magazines for a flat rate, has just been refuelled, and is ready to grow. The company is moving forward with €5.6 million in second-round funding, PaidContent has reported— an investment that will serve “to fuel growth and global expansion and to invest in product development,” according to co-founder Michael Philippe.
We last wrote about the startup in June, when it launched an English version for the UK market. There, Lekiosk partnered right off the bat with publishers such as IPC Media and Condé Nast, offering British users its characteristic bundle of ten magazine subscriptions at the price of £9.99 per month (in France it is ten for €10). Philippe told us at the time that they were off to “a very good start.” He said that they were preparing for further international expansion, with plans to conquer Italy by the fall, and additional European countries in 2013.
The new capital, which should help to make this possible, is coming from two French investors: CM-CIC Capital Privé, which has also backed music-streaming website Deezer, and the state-affiliated CDC Enterprises. The investors were no doubt attracted by Lekiosk’s success; it is France's highest-grossing iPad app, and its revenue has more than quadrupled over the last year, from €1.4 million to €6 million. “We have had over 700,000 downloads of our app,” Philippe told PaidContent; “there are around 30,000 subscribers to our 10-magazine bundle and we have 100,000 paying active users on the platform.”
There is still, however, much room to grow. Besides reinforcing their position in Europe, beginning with the long-anticipated Italian launch, Lekiosk is seeking to broaden its roster of publishers, and to adapt to new platforms. It is seeking to tailor its iOS and Android apps to the screens of smaller tablets (such as the Nexus 7 and the iPad Mini), and to build a Windows 8 version for the Microsoft Surface. It is also planning to “socialise” (Hollande detractors, stop snickering) the magazines it offers. “Putting social interactions into our app is our main development for next year,” said Philippe. Although he declined to go into detail at this stage, Philippe told us that this would likely involve adding features that permit readers to comment on and share magazine articles, and stimulating interaction not only between readers and the magazines, but also among the magazines themselves.
Lekiosk’s model is similar to that of Next Issue in the United States or Piano Media in Eastern Europe: by offering a reasonably priced prix fixe content menu, it allows those readers who may be reluctant to purchase several individual subscriptions at top dollar a much more affordable way to read their fill. According to Philippe, bundling ten magazines also encourages readers to diversify their tastes. “Eighty-five percent of subscribers are subscribing to magazines they would never have read in paper or digital without the bundle,” he said. And where pricing is concerned, 9.99 appears to be the magic number; in the US, Next Issue’s basic pricing plan similarly asks for one penny shy of a tenner.