Meet Zette, the Spotify of Internet Content

The Offer Sheet readers —

Today we are thrilled to be sitting down with Yehong Zhu, founder and CEO of Zette, the company knocking down internet paywalls. They have massive momentum, deals with 110+ publishers, 5x growth in 2023 and a time in the internet’s evolution ripe for this kind of product.

They’ve already secured over $1.7MM in funding from the likes of VCs such as Afore, Halogen and others.

And are now opening up the opportunity for retail investors to get in. Investing goes public on Feb 29th, but readers of The Offer Sheet can get in ASAP with early bird terms on Wefunder!

In the interview below we cover a wide variety of topics including how exactly it all works, what kind of growth they’ve seen, the concept of bundling in today’s digital world, their revenue model, how they stand out from competition, AI, and what an exit might eventually look like.

Pumped to share this with you all - vamos! 👇

OK, let’s start here. We love the concept of knocking down paywalls, in a way that’s super friendly to readers and fair to publishers. Can you tell us a bit about how Zette actually works? Can I choose which publishers I want in my bundle?

If you’ve ever run out of free articles, you’ve likely run into one of the biggest frustrations of modern-day internet browsing—paywalls. We solve this issue at Zette by magically dropping paywalls with just one click. (No more cache clearing, password sharing, or incognito mode!)

How it works is simple: Just add the Zette extension to your browser and browse online as usual. When you visit an article from one of our partners, we’ll pop up with a notification to unlock the paywall for a credit. Credits refill every month, for an affordable monthly fee.

We’ve struck deals with 110 publishers in our initial bundle, and our product is live on every single one. Anyone who signs up for Zette currently gets access to 100% of the publishers in our network, and we automatically detect paywalls on a given publisher’s page.

What has your traction looked like so far? What was growth like in 2023?

50,000 readers have already signed up. Our growth was 5x in 2023!

What is some of the feedback you are hearing from users? 

Readers love our product. We’ve gotten rave reviews about how delightful and easy-to-use it is. The main feedback we’ve heard is that people want more publishers, the ability to unlock paywalled content on their phones, and easier ways to discover interesting content—all of which we’re working on incorporating now, and also why we’re raising additional funding. 

It looks like you’ve had massive success in already raising a pre-seed to the tune of $1.7MM+ from VCs like Afore, Halogen and others. 

What are you hoping to accomplish with this public equity raise through Wefunder? And which do you think will feel more validating?

Public validation is the most potent form there is. At the end of the day, every single VC wants a startup that has product market fit, and product market fit isn’t possible without the support of the public. Our mission at Zette is all about democratizing access—so we thought, why not democratize access to our next funding round? 

We believe in giving power back to the people. By launching on Wefunder, we’re aiming to accelerate our growth, share the upside of our success with our early supporters by allowing them to invest directly, and gain true champions for our product who can evangelize Zette to their communities, bringing more readers onto the platform as a result.

Our equity crowdfunding campaign is only going to be live for a few weeks, and once the round is closed, it’s closed. If we become oversubscribed, we may not be able to let everyone in the round—but we’re going to do our best to accommodate as many investors as we can.

To me, bundling subscriptions is the way of the future. We’ve seen it in the TV space, with many of the streaming platforms ironically going back to what seems like the cable model. Why are you so bullish on this type of future?

Once in a generation you come across an idea that you believe will cause seismic shifts in the world. For me, that idea was Zette. I was a business journalist working in the newsroom at Forbes when I first thought of ”the Spotify model,” but for news. It just felt so obvious that I couldn’t believe it didn’t already exist.

Bundling felt like the only logical business model for digital journalism. Instead of competing against other publishers who all put up their own paywalls, the industry could cooperate and distribute the revenues from a single recurring subscription model amongst themselves. Readers could finally get access to all the journalism they wanted, instead of having to pick and choose the one or two subscriptions that they could afford.

Can you tell us a bit about your revenue model and how you guys, ya know, make money?

We’re a paid subscription model with 3 tiers. For light readers, pricing starts at $9.99 for 30 credits a month, where one credit unlocks one paywalled article. Daily readers can buy 60 credits for $19.99 per month, while avid readers can purchase 90 credits for $29.99 per month.

We share revenue directly with newsrooms so that every time you read, a journalist gets paid. With this pricing structure, we wanted every story to feel affordable enough for readers (at 33 cents apiece), while also generating enough revenue for us and our publisher partners.

Why is your relationship with such a high volume of quality publishers such a competitive advantage? How do you plan to continue to scale that part of things vs. a competitive entrant aiming to do the same?

Building these relationships has been years in the making. Media is a small industry and premium outlets don’t partner with just anyone. As a second generation journalist, I understand both the nature of the game and the people in it. This is lived experience that isn’t easily replicated by outsiders.

Since the death of print, the industry has been in dire need of innovation—a gap that Zette was founded to fill. Our commitment to improving the ecosystem for both readers and publishers, coupled with our significant traction to date, positions us strongly for future expansion.

We aim to scale our partnerships by leveraging our existing strategy of cultivating long-term relationships with newsrooms, and presenting them with new revenue and audience opportunities that are hard to turn down. When we win, publishers win.

What else makes you stand out from the competition?

Firstly, the paywall problem has not been solved even by established technology companies. Our biggest competitor is Apple News—and in order to read a premium article through Apple, you have to be an iPhone or Mac user, you have to access it through the News+ app, and if you try opening a link anywhere else online besides in the news app directly, you’re out of luck.

Zette is integrated directly on the backends of publisher websites, so that you can unlock articles no matter where you get the link. Our content licenses are also global, so you have access no matter where you are in the world. Our AI initiatives will also allow readers to easily discover the best content online—providing them a more personalized, reader-adaptive experience compared to most news tech platforms that depend largely on human editors.

Can you talk more about the AI component to what you do?

At Zette, we're enhancing our service with AI to help our users discover and read outstanding articles that are often hidden behind paywalls. Finding these hidden gems is challenging because they're not usually shared on social media, hard to find through search engines, and generally receive less engagement—all due to the paywall itself acting as a huge bottleneck.

Our AI-powered engine is designed to recommend the best content available to our readers, paywall-free. Our moat is data—thanks to our partnerships, we have access to super premium content compared to what’s available in the public domain. This lets us offer content that's not just personalized and interesting, but also more substantive than what you might find on other platforms. Any other AI company would have to catch up to our deals to do the same.

What’s on the product roadmap for 2024?

We’re actively focused on addressing our top three user requests by closing more publisher deals and building new products and features (including AI-powered recommendations!) that will help people access, discover, and share quality news more easily than ever before.

Can our subscribers invest early in Zette? Any perks for readers of The Offer Sheet?

Yes! Our round hasn’t yet opened to the general public, meaning we’re offering exclusive Early Bird access for readers of The Offer Sheet. The first $300k in investments will receive an Early Bird valuation and a 20% discount. Once we run out of Early Bird shares, the valuation will increase—so get in while you still can!

Typically when I invest in a company, I want to know more about the team running the show and what their background / experience is. Can you share more on that?

I’m the immigrant daughter of a journalist and an engineer, and I’ve loved media and technology all my life. Prior to founding Zette, I graduated from Harvard, built products at Twitter, and reported on public markets at Forbes. I was also recently named Forbes 30 under 30 in Media.

Every day I’m blessed to work with unbelievable talent. Our team comes from Harvard, MIT and the Quebec AI Institute—comprising the best dealmakers, engineers, and AI researchers across media (Forbes, Digital Trends), tech (Twitter, Entelo), startups (Classhook, Below the Fold) and AI (ServiceNow, MILA) around the world. We’re well-equipped to build the new frontier together.

Where do you see Zette in five years?

We see ourselves as the new front page of the Internet.

Today the market for content consumption is very fragmented. If you ask a dozen different people where they go to stay informed, you’ll get a dozen different answers.

We plan to cut through the noise with Zette. By curating the best content, we'll deliver only what truly matters to you daily in a simple, clean, and personalized way. This is the future of staying informed. In five years, we want Zette to be the first site you click on when you come online.

What could a potential exit look like in 5-10 years if readers want to invest? Acquisition, IPO?

We’d be an attractive acquisition target for any public company with a media tech angle and ambitions to scale, including all the FAANG companies. But our ambitions are bigger than that.

Journalism is just the beginning. Just like Amazon started by shipping books and ended up shipping everything, we plan to scale Zette’s pay-per-view model across digital content of all kinds—including e-books, academic journals, podcasts, shows and more.

We want to become the new category king in the digital media sector, and we’re targeting a venture-scale outcome (100x return) with the end goal of an IPO within the next decade. This is going to be the journey of a lifetime, and we can’t wait to invite your readers along for the ride!