Big early exits for livestreaming startups
What kind of business is worth $100m and grows a user base to up 1 to 10 million people within the first two years of launch?
Live streaming startups.
Any kind of software that allows their users to broadcast live video over the Internet is currently a hot topic for potential acquisition — both by media companies and by major online tech giants.
That is why within the first 4 months of 2021, multiple livestreaming companies have been sold for over $100–200 million in valuations.
What makes livestreaming startups so valuable?
Live video streaming is one of the most exciting online evangelism techniques for content creators. Compared to blogging or traditional passive forms of social media, live video attracts users and attention at a massive scale (millions of viewers) almost instantly. Moreover, it’s convenient as well as interactive, offering people something they want even when they don’t have to commit to doing anything (watching at home = good option).
With the video revolution now well under way thanks to companies such as Twitch, YouTube and Facebook, live streaming has emerged as an opportunity to increase exposure for niche target markets. Even though these platforms are not entirely stable, there are still opportunities to get noticed. Many long time livestreamers on these platforms have access to large followings and this allows for much more effective growth that would not otherwise be possible.
The new niche market livestreaming companies are all growing quickly and being sold out for a high valuations within each market niche.
Here are some examples of premature high valuation exits for livestream startups:
FITE — MMA livestreaming platform
# of users on exit: 10 million
VC funding till exit date: $11 million
Estimated exit size: $150-$200 million
Sold to Triller this year after Jake Paul v Ben Askren fight was going to be featured on it.
Lightstream — in browser white label livestreaming for content creators
Revenue on exit: $1.8 million
VC funding till exit date: $11 million
Exit size: $36 million
Sold to Vitec, a content creation software and hardware company
Pantaya — Hispanic market livestreaming platform
# of users on exit: 900,000
VC funding till exit: none
Exit size: $124 million
Acquired by Western Hemisphere, a movie and TV company
Streamyard — livestreaming studio for content creators
Traction on exit: $10 million revenues and 100,000 b2b customers
VC funding till exit: unknown
Exit size: $250 million
Acquired by Hopin
Many of these high valuations occurred solely for the underlying technology alone. Which means investors will pay a high price even without many users.
And even each user commands a high price because they are loyal for long periods to each streamer and offer long-term dedicated revenue to their favourite streamers.
Lessons from early stage livestreaming startups:
The key to successful early stage livestreaming startups is having a community you can build excitement about and build brand loyalty around.
Streamers won’t watch generic streams on just the big platforms such as Facebook or Instagram.
They expect streams targeted to their group.
Part of each livestream platform’s appeal is in deciding who a streamer’s audience is, and understanding why they should care about your product. Most livestreams have a three stage audience: hard core fans, casual fans and grass roots evangelists. Each stage has specific needs, and how you choose to market your product uses these needs as clues to where your audience stands on the product. Tips from e-commerce brands and founders on how to attract your audience to your platform and how to personalize their experience are essential.
