Blurb acquires HP’s MagCloud, aims to dominate long-tail publishing
FORTUNE — Blurb, a book-printing service, has started making noises again after a few quiet years. The San Francisco-based startup has 115 employees and $21.6 million in venture capital funding. It’ll have close to $100 million in revenue next year, and it’s been profitable for some time.
And yet, until very recently, Blurb has held off on expanding into a very obvious adjacent category: e-books. With Amazon’s push into self-publishing, it follows that the startup might want to help its self-publishers sell digital copies of the books it is printing.
The reason Blurb has held off, according to CEO Eileen Gittins, is to avoid being too early. The iPad only opened its API for book publishing two years ago. The Kindle Fire’s infrastructure is fairly new, too.
Now, two years in, it’s finally time. Last month, Blurb announced Bookwright, a product that allows authors to lay out their work for free. Previously, the company had been focused on printing image-driven books for designers and photographers, partly because Gittins’ background is in photography.
Alongside Bookwright, Blurb announced a partnership with Amazon (AMZN). The deal allows Blurb-designed books to be self-published on Amazon with a click of a button. The partnership also gives authors access to a very enticing feature: Amazon only takes a 15% cut on Blurb books, a steep discount from its normal fee of up to 45%, Gittens said. Amazon has agreed to the low fee because it wants access to Blurb’s 2 million authors, who have produced 8 million books since 2006. The partnership yielded 3,000 books in the first three weeks.
Now, Blurb has announced another big move: On Monday the company acquired MagCloud, a self-publishing platform for magazines, under a licensing agreement from HP (HPQ). MagCloud always existed as a bit of a rogue project within HP, according to Gittins. In the deal, Blurb takes over the company’s technology and operations, as well as its 10,000 (approximate) customers. As with its books business, Blurb will offer warehousing and fulfillment services to customers, acting as a one-stop-shop for boutique and niche publishing.
Blurb will likely seek an exit in the next two years, Gittins said, either through an IPO (“Banks have been calling,” Gittins notes), or a sale to a strategic partner such as Amazon or Adobe. (Blurb is embedded in Adobe’s Lightroom tools with a “Send book to Blurb” button.) Gittins sees her business as a YouTube for books, helping millions of independent long-tail publishers get distribution.
And it is definitely long-tail: Blurb is home to the “worlds largest” collection of books about women’s roller derby teams, said Gittins. Tattoo books are popular, as well. On Kickstarter, publishing is the fourth-most popular category, and a big chunk of those books ultimately print through Blurb, according to Gittins.