Novel Effect is on a roll.
After participating in the inaugural Alexa Accelerator, appearing on Shark Tank, and winning a Webby Award, the Seattle startup today announced a $3 million investment round to support the growth of its voice-enabled storytelling platform.
Alpha Edison, TenOneTen, and Waverley Capital led the Series A round, which included participation from Maveron, Lux Capital, McCune Capital, and Amazon’s Alexa Fund, a $100 million investment arm used by Amazon to invest in voice-based interaction companies.
Novel Effect’s app uses voice recognition technology to automatically add music and sounds to the book reading experience. More than 150 audio “soundscapes” are available for free if a user owns a print book; they also run in the background with e-books.
The company competes in a fast-growing market for conversational speech technology led by giants like Amazon and Microsoft, as well as a number of smaller startups.
Melissa and Matt Hammersley got the idea for Novel Effect when they were expecting their first child, Eleanor. They wanted to create something that would help them bond as a family and use technology to bring a little more magic into her life.
A light bulb went off at their baby shower, when a friend did a theatrical reading of a book that would soon become Eleanor’s. What if technology could simulate that experience and turn story time into an almost cinematic experience?
Since then, Novel Effect has racked up 50,000 downloads and 10,000 active monthly users who spend more than five minutes on the app for each session. The company makes money from publishers and authors who pay for their books to be enabled by Novel Effect’s voice soundscapes, as well as commissions from book sales made on its platform.
The 11-person startup will use the fresh cash to acquire more users, grow its internal team, and expand its technology into new product categories and platforms. It plans to roll out an Android app and Alexa Skill in the future.
“As we grow and expand the content in our library, we will be launching new revenue streams and models,” Matt Hammersley told GeekWire.
Founded in 2015, Novel Effect was apart of the first-ever Alexa Accelerator run by Techstars in Seattle last year. Other startups from the cohort to raise investment include Pulse Labs and Play Impossible.
Novel Effect was also featured on Shark Tank this past December — it did not take investment from the show’s investors — and just won a Webby Award for “Best Integrated Mobile Experience.”
Startup Spotlight: Novel Effect aims to make story time more magical for kids using voice recognition technology
“We were really impressed by Matt and the entire Novel Effect team during last year’s Alexa Accelerator, and this round of funding represents another big milestone for the company,” Paul Bernard, director of the Alexa Fund, said in a statement. “Their platform is a great example of how voice technology can augment and improve offline experiences, and we think customers are going to love using it.”
Edgar Bronfman Jr, general partner at Waverley Capital, hinted at how Novel Effect can apply its technology beyond children’s books.
“While Novel Effect’s platform is currently focused on children’s picture books, their awareness of and commitment to voice-first technology promises to be a game-changer across all categories of entertainment – books, movies, television, game play and more,” he said in a statement.
Daniel Leff, managing partner at Waverley Capital; Nick Grouf, managing partner at Alpha Edison; and Bill Carr, former vice president of digital media at Amazon, will join the company’s board as a result of the new funding.