Wattpad Raises $17.3 Million in Series B Funding Led by Khosla Ventures

Toronto’s Wattpad, the winner of Best Overall Canadian Startup for 2011, announced today at Book Expo America that it has raised $17.3 million in its Series B round of financing. 

This funding round was led by Khosla Ventures of San Francisco and includes Jerry Yang, co-founder and former-CEO of Yahoo! with existing partners Union Square Ventures of New York and Golden Venture Partners in Toronto also participating.

Techvibes readers will recall that Wattpad offers a mobile, social, eReading platform where readers and writers connect directly. This new interactive model has gained tremendous traction with users spending 1.7 billion minutes on Wattpad each monthwhich is more than Pinterest.

Wattpad currently hosts over five million user-generated stories in 25 languages, with 500,000 new stories added each month. Wattpad has reimagined both print and digital reading by delivering a broader social entertainment experience: writers share their work chapter-by-chapter with readers, while readers comment and shape storylines in real time. Over 70% of Wattpad’s usage comes from its mobile apps.

 “In the mobile, social eReading market there’s a great opportunity to innovate. One critical element to achieve this leadership is to have visionary founders who can balance the needs of their rapidly growing user base while scaling their technology platforms,” said Yang. “Wattpad has this unique combination of talent in their leadership, which has led to their extraordinary community growth.”

That’s a pretty strong endorsement from a co-founder of Yahoo! for Wattpad CEO Allen Lau and his team. And $17.3 million from two top-tier US funds for a Canadian-based consumer Internet company ain’t bad either.