Giggles may be like most of us when it comes to Instagram: she uses the platform to post pictures of her recent hikes, shopping trips, and Valentine's Day chocolates. The only difference between you and Giggles is that she's a demonic clown, dressed in a bloody tutu with a frightening smile filled with pointed teeth.

Scroll through social media these days and you may encounter spooky characters like Giggles, created by the horror content company Crypt TV. Founder and CEO Jack Davis launched the company four years ago with the goal of becoming the "Marvel for monsters," a generator of scary characters that distributes programming through social media. 

"We want to use the phone to create iconic characters, but just like Marvel, we believe our characters can live forever," says Davis, who is 26. "While we are giving birth to characters on social media, we believe they can exist in any format."

With Giggles, fans can follow her daily life, learn about her background, and recommend activities for her to try (think: roller skating or playing the ukulele). The other series are episodic shorts, like The Birch, about a young man who befriends a tree-like monster after he's bullied, and Sunny Family Cult, which follows a young woman whose family is part of a murderous clan.

Crypt been a hit with viewers--a handful of episodes have been viewed more than 5 million times, while most generate numbers in the hundreds of thousands--and produced revenue in the seven figures last year, says Davis, who declined to get specific. What's more, Crypt closed a $6.2 million round of funding on Tuesday, led by Lerer Hippeau, NBCUniversal, Advancit Capital, and Blumhouse Productions. This is in addition to the more than $3.5 million Crypt has already raised.

Beyond Crypt's substantial viewership numbers, the company has nearly three million Facebook followers and more than 578,000 people have subscribed on YouTube. Crypt builds a loyal fan base by testing new characters, gauging interest among its viewers, and killing off the ones that don't perform well. One year ago, 25 percent of new characters turned into developing storylines; now that rate is up to 40 percent, says Davis.

"Scary for mobile"

Davis got the idea for Crypt after noticing both the rise in social-media content and the lack of short-form horror. "No one was doing scary for mobile," says Davis. "No one was bringing this hugely successful genre to this medium and space."

Davis wanted to test his theory and turned to friend, filmmaker Eli Roth, who is best known for terrifying movies like Hostel and Green Inferno. In October of 2014, the duo launched a contest to see if horror fans would enjoy watching and making abridged, mobile horror content. "Years ago, you'd have to take three or four movies for a character to catch on, but in the internet age a character can become a star overnight," Roth wrote in an email to Inc. "What we've created is a network where the next generation of fans can not only consume content but create it themselves and share it."

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They asked participants to create a six-second scary short--promising a chance for the winner to develop the idea with Roth--and received more than 15,000 submissions. "Sometimes when you're starting your own company, all you need is that little kernel," Davis says. "It gives you proof that we might be onto something."

Six months after the contest, Davis launched Crypt TV. In addition to working with Roth, Davis partnered with Jason Blum, the founder of the production studio Blumhouse, which made the Oscar-winning film Get Out. Blum became one of the company's first investors and also contributed to the most recent round of funding.

"I was very impressed with Jack, it felt like he had the DNA of an entrepreneur coursing through him," Blum says. "I think they are cutting out a terrific niche for themselves in a space where there are no other meaningful players doing anything."

Davis plans to use the funding to aggressively expand his roster of monsters, in part by increasing Crypt's presence on YouTube and bringing the stories to new platforms like podcasts. The goal, Davis says, is to focus on long-term growth and building the lexicon of characters. He also hopes the funding will help Crypt make more merchandise, which is a small but growing revenue stream for the company.

Crypt sells clothes and costumes based on Giggles and other characters on its website and through about 200 Spencer's stores. Prices range between $49.99 for Giggles's mask and makeup kit to $19.99 for a Sunny Family Cult-themed iPhone cover. But the main revenue driver is Crypt TV's co-production and live event deals. The company works with major film studios to create original and marketing content ahead of movie releases.

One of the biggest hurdles Crypt will face is competition. Davis says his company's biggest rivals are "every other person making entertainment on social and mobile." Happily, there is a strong thirst and fandom for horror: Get Out, released last winter, was nominated for four Oscars and earned $176 million in domestic total gross, according to Box Office Mojo. What's more, about 361,000 people watched all nine episodes of Stranger Things season two within the first day of its availability on Netflix, according to Nielsen.

That love of horror makes the future of Crypt less frightening for Davis, as long as he continues to scare his audience with menacing trees and evil clowns.

Published on: Mar 27, 2018