Funstory.ai recently announced the completion of its Series A+ round of financing, worth tens of millions of yuan, invested by NBT Capital. At the end of last year, Funstory.ai had already received tens of millions of yuan in its Series A round of financing from investors, including Lianshang Networks, Himalayas, and Legend Star. These two particular rounds of financing will be primarily used for iterating the company’s AI translation technology, promoting customized writing programs for online authors, as well as pushing scale and development of online translations. Funstory.ai, established in November 2017, is an open platform that translates Chinese online literature to languages of other countries via AI solutions — its founding team members coming from companies like Microsoft, Google, Amazon, Baidu, and Yeeyan.
In August 2018, Funstory.ai received several million yuan in its angel round of financing and obtained 10 million yuan in the Pre-A round of financing last year. The investment was led by WiFi Master and Lianshang Literature, followed by Legend Star. In the past decade, Chinese online literature, represented by “Candle in the Tomb”, has expanded in the overseas market through foreign licensing. Despite China’s web novels exceeding more than 24 million copies and Chinese writers numbering more than 17 million individuals, less than 300 of those online novels have actually spread overseas. Furthermore, the cost of translating a single novel can go up to as high as 600,000 – 800,000 RMB. To improve the translation efficiency of web novels while, at the same time, reducing the cost of translation, Funstory.ai has independently developed an AI translation system capable of increasing the number of page views, the efficiency of translations, and the publication of Chinese novels.
In fact, its system can improve industry efficiency by 3,600 times and reduce costs to 1% of the original. Funstory.ai claims to be the largest online overseas publishing platform at the moment, with an average of nearly 4,000 novels updated daily. Its AI production and distribution system can publish more than 3,000 novels in a single month at a speed of one volume every 15 minutes.
In 2019, policies regarding the industry of online literature fell under strict supervision. Thus, a large number of novels were taken off the shelves, causing the revenue earned by the local industry to fall sharply. With the entire industry looking for a new path to grow and develop, more and more web novel companies began considering stretching out into the overseas market. However, they struggled without access to AI translation technology or data to support their ideas. Currently, there are more than 50 mainstream online literature websites in China, including Lianshang Literature, zhangyue.com, zhwenxue.com, motie.com, and cmread.com — all of which have settled on the open platform of Funstory.ai. Among the ten largest companies in China’s online literature industry, seven have decided to adopt Funstory.ai’s solution of distributing their books overseas.
Moreover, Funstory.ai can distribute its translated content to nearly 50 platforms worldwide with a single click of a button, including Kindle, Google Books, Apple Books, Kobo, Barnes & Noble Bookstore, and other online publishing platforms overseas. At this time, Funstory.ai’s main source of income comes solely from paid subscriptions by chapters as the membership and advertising models have yet to launch. The CEO of Funstory.ai, Tong Ye, told 36Kr that their users and revenue maintained an average monthly growth of 30% in the first half of the year.
The latest research report released by iResearch regarding Chinese literature being distributed overseas in 2020 shows that, in 2019, the number of overseas Chinese online literature users reached 31.935 million, and the overseas market of Chinese online literature reached 460 million yuan. Despite its development still being in its initial stage, the increment can be seen to be rather impressive.
As for the topic of competitive advantages, Tong Ye mentioned that in addition to AI translation technology, their core advantage lies in the construction of a web-based business system that covers the entire process of production, distribution, and monetization. Just as the production of a car requires the assembly of tens of thousands of parts, the translation of a novel also requires many meticulous steps. To begin with, it requires the human translators to comprehend the text translated by the AI and edit accordingly, which already takes up quite some time. Furthermore, establishing overseas distribution platforms would also prove to be difficult at times. Even the Internet giants would find this task to be rather troublesome at times as it consumes a lot of time and labor costs. In addition, trying to obtain a large number of copyrights may also appear as a major obstacle during this process.
When asked about the future, Tong Ye stated they intend to extend the whole industry chain by organizing the Chinese authors to customize their writing according to the preferences of overseas readers while obtaining the exclusive right to the work. By doing so, it can increase the speed at which the content is being updated online as it allows the author to go around the traditional publishing process filled with all kinds of complicated and tedious steps. Moreover, it can potentially increase the profits by up to 50%. Aside from this, a good deal of web novel platforms nowadays tends to conceal the actual traffic and advertising revenue from their authors. The solutions proposed by Funstory.ai, on the other hand, provides a more transparent revenue model for their authors.
Aside from the usual translations from Chinese to English, Funstory.ai also plans on launching multilingual translations in languages such as Spanish, Arabic, French, and Russian. Tong Ye also mentioned that when it comes to the kinds of content they translate, Funstory.ai will specialize in translating web novels, targeted more towards the entertainment side of the spectrum, rather than the more serious and complicated literature focusing more on teaching their readers. After all, people these days tend to have a stronger liking towards such web novels, which in return provides the incentive for the users to pay and renew their subscriptions.
Moving on from that topic, Funstory.ai also intends on building a friendly community of readers. Tong Ye mentioned that most people would not spontaneously form a community to discuss serious literary works such as “To Live,” a famous Chinese novel. However, when it comes to online novels, the readers tend to look for a community to share and discuss what they’ve read. It can even be said that online literature pushes “reading” from a private setting to a public one. The discussion forums on the Babelnovel App and its Facebook Group have not online increased the number of readers on the platform but also the number of users interacting with one another.
As for the investment logic of the A+ round of financing, Feng Jialiu, Senior Investment Manager of NBT Capital, said, “NLP (Natural Language Processing) and its applications serve as a significant course branching out from the field of AI. Funstory.ai’s NLP-based novel translation capabilities undoubtedly make them the leaders of the industry as it has accumulated an abundance of useful data. The CEO’s previous experience in the publishing industry also allows the team to have a good understanding of the content field. By supporting the business with their revenue earned, Funstory.ai has the opportunity to promote NLP technology iteration and find its next point of growth. With China’s increasing international influence, the spread of Chinese culture overseas also greatly influenced our decision to invest in this industry.”
Gu Xiaobin, a partner of Lianshang Networks, said, “Lianshang Networks is a mobile traffic platform and big data company in China that pays attention to emerging technologies such as AI and data intelligence. The combination of machine translation and online literature is a branch within the field of AI with great potential that we constantly keep an eye on. Funstory.ai possesses mature artificial intelligence that provides effective solutions and has a deep understanding of the content within particular texts. This breaks the inefficient predicament of manual translation in the past and opens up a new path for distributing cultural works overseas.”
Xing Linlin, the Investment Director of the Himalaya’s Strategic Investment Department, stated, “The solutions provided by Funstory.ai have greatly reduced the production cost of translating web novels into various other languages, meeting the needs of overseas readers by quickly obtaining newly updated content. Himalaya has been a leading audio platform in China in recent years. We also continue to deploy overseas business and look forward to helping Funstory.ai make better progress in the voice of online texts through investment and strategic cooperation, further providing overseas users with integrated listening and reading services.”
Wang Zheng, the Investment Manager of Legend Star, commented, “NLP is the earliest artificial intelligence in development, and machine translation is the sector within the technology industry that we are very much optimistic about. Funstory.ai has not only accumulated a large amount of data in this field but also utilized and applied the knowledge gained from such data to the greatest extent. This was certainly only made possible using the core team’s years of experience in the field of publishing media. With China’s improving comprehensive national power and the launch of the Belt and Road Initiative, the spread of Chinese culture overseas has naturally increased and become more relevant. All of these elements give Funstory.ai the opportunity to grow into an outstanding corporation dealing with technology and culture.”