Japan’s ‘viral mills’ Curazy raises $1 million from three investment firms

Masaru Ikeda by Masaru Ikeda on 2014.7.12

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See the original story in Japanese.

Tokyo-based BitGather, the startup that operates viral content site Curazy, announced earlier this week that it has fundraised 100 million yen (approximately $1 million) from CyberAgent Ventures, DeNA, and Skyland Ventures. Coinciding with this announcement, the company rebranded its company name from BitGather to Laugh Tech. They will use the fund to hire new writers and editors, and are also planning to introduce a mobile app for iOS and Android in mid-August.

Curazy has been focused on curating funny news topics from around the world. Since its launch in January, it has acquired over 5 million monthly unique users and over 19 million monthly page views. According to Laugh Tech’s co-founder and CEO Shinnosuke Ito, what’s unique about them is that they have a primary base of readers in their 30′s, and its male to female ratio is almost 50/50. He elaborated:

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Shinsuke Ito

We aim to deliver content that can be a substitute to TV variety shows. We have a bit more female readers than male readers. I assume that’s because we are not dependent on indecent topics to generate user traffic. Our traffic peak comes after 8pm on weekdays, especially around 10pm.

For curation sites like Curazy, a big problem is operating costs, which are likely to increase in proportion to the growth of their business. Curazy has a several-person team for content curation. To publish more articles and differentiate themselves from other viral content sites, hiring writers and saving operating costs are key issues for the company.

Laugh Tech is developing an analytics tool called Hot Pages. Metrics from this are based on the number of Facebook likes or retweets that published articles earn. It is unclear how they can analyze quantitatively these metrics by associating them with elements in an article, but they say it helps figure out the kind of articles that are more likely to attract readers and contribute to traffic growth. With this foolproof system, even the “humorless” can curate humorous news, allowing the company to hire new curators from a larger pool of “less capable yet cheaper” personnel.

I think the business model of viral content sites is similar to that of private TV networks in Japan, which have been pursuing this business model for the last 60 years. A typical broadcaster creates a number of TV programs to attract as many viewers as possible for the lowest production costs with the aim of consuming as much time of viewers as possible.

It will be interesting to see how Curazy can make the most of their strength in this space.

Masaru Ikeda

Masaru Ikeda

Masaru started his career as a programmer/engineer, and previously co-founded several system integration companies and consulting firms. He’s been traveling around Silicon Valley and Asia exploring the IT industry, and he also curates event updates for the Tokyo edition of Startup Digest.

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