In the black for the first time – the recipe for success of the non-fiction start-up Blinkist
The founders of Blinkist: Holger Seim, Tobias Balling and Niklas Jansen (from left)
Source: PR / Blinkist
Blink is almost the key messages of popular non-fiction books. Thanks to aggressive online marketing, the Berlin start-up is known to many people. Now the company has made money for the first time. The corona pandemic also played a part in this.
In 2019, the Berlin start-up Blinkist, which packs the key messages of popular non-fiction books in memorable short texts, still lost ten million euros. The company has now published its 2020 annual financial statements – with a profit of 728,000 euros. It was the first profitable business year in the company’s history.
Blinkist seems to have benefited from the corona pandemic to a certain extent: The willingness to pay for learning content online has increased significantly in recent years. “This trend was accelerated by the corona pandemic. In addition, the increased acceptance of apps in conjunction with audio content has led to growing demand, ”the report said.
Blinkist gained more and more paying subscribers. In addition, spending, presumably in the area of marketing, was cut back a little.
Blinkist will celebrate its tenth birthday in the coming year. The idea and basically the business model of the Berlin start-up have remained almost the same from the start: users of the app have access to a selection of excerpts from current non-fiction books, biographies, and guides that now includes 5000 titles.
There are also audio formats, recently podcasts, with which you can listen to the quintessence of fat hams. An annual subscription for access to this virtual library costs around 80 euros. According to Blinkist, the app has around 20 million active users. According to the annual financial statements, this number has increased by eight percent in 2020 compared to the previous year.
Niklas Jansen, Holger Seim and Tobias Balling founded Blinkist in 2012 out of self-interest. As management consultants, they didn’t have time to read good books, and the summaries of existing competitors at the time didn’t convince them. At that time, the Berliners received seed capital from Hubraum, Telekom’s incubator.
There is resistance to Blinkist from book publishers and authors who accuse the start-up of gross copyright violations. Nevertheless, the Berliners manage to convince investors of their idea, including Headline, IBB Ventures and the US venture capital firms Insight Venture Partners and Greycroft are investing several million. “Gründerszene” follows the development of the company here.
Blinkist has vmuch more subscriptions sold
In its annual report, the company writes that the corona pandemic has reinforced the already increasing willingness to pay for high-quality online content. Compared to 2019, Blinkist increased its sales by 26.4 percent from a good 33 million euros to 42 million euros.
“The increase in sales results primarily from the success of the subscription model and the continued internationalization,” says the annual report. Blinkist also offers its content in English and has a wholly-owned subsidiary in the USA. According to the information in the annual financial statements, the company now makes 70 percent of its sales outside the European Union.
With the broadening of the range of content, expenses for staff (the Blinkist excerpts are written by specially trained authors) rose by almost 16 percent from 9.7 to a good 11.3 million euros. The company saved around 3.5 million euros in other operating expenses.
“This development was mainly determined by two different developments. First, we’ve reduced our marketing spend. (…) Secondly, the smaller volume of marketing expenses led to an increased focus on very qualified customers for our product and thus increased the marketing efficiency of our campaigns, ”explains the report.
In the second half of 2020 in particular, Blinkist “prioritized profitability rather than growth and reduced expenses,” it continues. This is how the first-time sales gain can be explained.
Probably not profitable again in 2021
All in all, the company’s balance sheet looks healthy. The report also states that liquidity is ensured due to the reduced cash burn, so that no financing round is planned until 2022.
The annual financial statements also take a look at the year 2021: An increase in sales of 14 percent is planned, largely through the sale of even more subscriptions.
In addition, the focus on B2B business and content licensing promise potential. However, higher personnel costs are to be expected. And marketing spending should also go up again in 2021, so that a negative annual result with a loss of seven to eight million euros would be expected in 2021.
After all: Blinkist has now provided proof that money can also be made with the business model.
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