Issuu is a digital publishing platform that enables businesses to turn their content into SEO flipbooks, social stories, GIFs for emails, and other content for multichannel digital campaigns. The company’s slogan is “Create Once, Share Everywhere” because businesses using the platform create their content once then upload it for translation for various channels. Issuu is growing, and CEO Joe Hyrkin sat down with Latka to discuss that growth.
- Issuu has more than 1 million brands, more than 50K of which are paying to use its platform.
- The company’s ARR has climbed to $30 million.
- Its valuation is $500 million or a multiple of 16.67 of its ARR
How Issuu Has Grown Its ARR to $30 Million
Issuu’s customers include SMBs and employee groups of international brands, such as Etsy, National Geographic, NASA, and Sotheby’s. It has grown its ARR primarily by adding new brands as customers. In the past six years, the company has doubled its customer numbers from 100K to 200K. It gains new customers through word of mouth, advertising, SEO, and through customers observing that others are gaining value. For example, a real estate agent might look at a furniture company’s catalog and realize that she can use Issuu, as well. The company also is growing its customer base through marketing to specific niches, such as restaurants.
Although the company receives some money from the sale of advertising, its revenue is 80 percent SaaS. The company’s pricing structure has four tiers. The first tier, Basic, is free, but the company sells advertising against those. The second tier is Starter at $19 a month and allows for one user. Premium is $40 a month and allows for three users. It also provides additional features above those in the Starter package, such as embedded videos. The Optimum plan allows for 25 users and additional features beyond the Premium package, such as unlimited private sharing. Issuu’s average customer is five to 10 team members.
Why Issuu Just Raised $31M in Debt Funding
Issuu has recently raised $31 million in Series C debt funding from Capital IP Investment Partners, and the debt represents about one times its ARR. The loan terms are standard, a roughly 10 percent interest-only loan for four years, with less than a 1 percent warrant, Hyrkin said. Issuu is comfortable with that debt load, and Capital IP was comfortable lending it for two significant reasons, Hyrkin said. The first is the growth of the market. The pandemic has forced restaurants and other businesses to communicate digitally through online menus, for example, which has driven growth for all companies in the industry space. An example is Canva, an Australian company valued at $40 billion.
The second reason for the comfort is Issuu’s growth. Issuu has been growing about 30 percent year over year and is confident of continuing to grow. Hyrkin uses the term “ProGrow,” which means profitable and growing, to describe its status.
“We raised the money because the market is massive, and the opportunity is massive. We want to reach the market more effectively and innovate dramatically against the product,” Hyrkin said.
Capital IP previously invested in Issuu during its venture round. KDDI Open Innovation Fund and Heartcore Capital invested during the Series B round.
How Issuu Uses Its Team of 120 Effectively
Issuu also has doubled its team size in the past five years, from 60 to 120 employees spread over four offices. About 30 team members are based in the United States; the rest are distributed between the company’s offices in Copenhagen, Berlin, and Braga, Portugal.
Hyrkin joined Issuu in 2012. He is an experienced CEO, having more than 25 years of experience in the tech industry. He’s led companies from startup to the IPO stage. He’s held top executive, business development, and product leadership roles at innovative Silicon Valley companies backed by major venture firms. Hyrkin served as CEO of Wordnik, where he raised $11.5 million in venture capital funding. Earlier in his career, he served as CEO of SingleFeed and as Entrepreneur in Residence at Trinity Ventures. Before that, he held key sales leadership positions at Gaia Interactive, Yahoo!, Flickr, and Virage, Inc. He directed The Economist Group’s business in China and has extensive board experience. Hyrkin was educated at the State University of New York at Albany and as an international student at Beijing Normal University in China.
Other key executives are Rolf Ussing, CFO; Kevin Walker, SVP Marketing; and Audrey Vandenbroeck, senior director of customer success and support.
Will Issuu Reach 1M Paid Brands By Next Year?
Issuu considers two metrics to be the most significant. The first is customer engagement, or how often and how the customers are using the platform. “We look at whether we are able to give value to our customers,” says Hyrkin.
The second metric is the number of paying customers. When the number of paying customers increases, “it enables us to understand that we are running a good business, and it also keeps us in business,” he says.
Issuu thinks reaching the 1 million paid customer milestone is realistic in the next year as the market continues to grow, and the ecosystem continues to develop. Over the past few years, Issuu has seen that ecosystem grow from being primarily websites to now include multiple social media sites, emails, and mobile sites. Many of these sites, such as Instagram, require businesses to create natively for that site.
The growth in the number of digital media increases the value of Issuu’s services to its customers. “We are enabling you to create once and leverage us to get it on all those platforms. We can take your assets and create a catalog to share across all platforms,” Hyrkin says.
Will Issuu be able to capitalize on the opportunities in the industry to grow its paid customer base phenomenally? And, if so, can it increase its market share against competitors such as Yumpo, FlipHtML5, and Joomag? Issuu has a great start. Watching this company and industry evolve will be interesting.