Today's internet users use video to communicate with each other. Creators are also at the core of the content being created and watched online. A startup that allows creators to produce and monetize work on a platform is today announcing a large round of funding. This highlights how big and lucrative the creator economy has become.
StreamElements provides analytics and production tools for people who livestream on platforms such as YouTube, Amazons Twitch and Facebook. It has raised $100 million to fund its development of its tools. This money will also be used to expand its business and market its platform to more creators.
Gil Hirsch, co-founder, stated that our goal is to be wherever creators are. This means expanding to new platforms like Trovo. This means that we have to go beyond livestreaming and bring our audience-driven technology to YouTube videos, where we are creating industry firsts.
The company is competing against many other companies in the so-called creator economic, which includes many video platforms that build their own production and monetization features.
The Tel-Aviv/Los Angeles-based company has announced significant executive changes to keep their business focused. Gil Hirsch, co-founder, will assume the role of CEO. Doron Nir, who had been the CEO until now is moving to the presidency. Yuval Tal is the COO, Jason Krebs is CBO and Udi Hoffmann is CFO. Or Perry and Reem Sherman are the other co-founders.
SoftBank Vision Fund 2 leads this round. It also includes new backers PayPal Ventures & MoreTech, as well as past investors State of Mind Ventures, Pitango, Menorah and Mivtach Shamir.
StreamElements won't disclose its valuation. However, this round comes in the wake of a period of strong growth. This is after a long period when user-generated videos consumed increased by over 80%. This was due to the popularity of apps such as TikTok and Instagram, YouTube (now with 40,000,000 gaming channels), and Twitch (which has passed 2 billion hours of video watched in January 2021), but also because video became a lifeline for many after other activities, and sometimes even after Covid-19.
Hirsch shared his thoughts in an email interview with me about how the pandemic had had a huge impact on our business. People in quarantine watched more content and more people began creating it. This is evident in the fact that our monthly users increased from just a few hundred thousand to over one million less than a year ago. Brands had to shift their marketing budgets from in-person events towards digital campaigns, with livestreamers becoming more attractive as a promotional tool. We are often asked by major brands to coordinate influencer-driven sponsorship activations, as that is what we do best.
StreamElements reported that usage of their platform grew by 233%. It has also seen strong traction from some of the most popular creators. The company stated that more than 60% of top content creators with 20,000 views or more use the StreamElements dashboard.
StreamElements is known for its livestreaming services and its work with gamers on platforms such as Twitch. The company stated that it has provided some services in this area but will now be doubling down on what it considers an untapped market.
Hirsch stated that YouTube has more than 40 million active gaming channels. This makes it the largest global gaming platform. On-demand videos make up the majority of the content, but they lack the real-time engagement functionality which has made livestreaming so popular. To strengthen communities around demand videos, we are focusing on infusing them with dynamic interactive features.
StreamElements creator tools currently are free to use. Hirsch explained it to me as: The primary way we generate revenue through brand partnerships. Our proprietary technology powers most of the top creator channels. It enables unprecedented depth in terms the measurement brands are looking to find. We offer influencer-driven sponsorship activations. He said that the majority of the company's creators are located in the US, Europe and Brazil. However, the goal is to tap more people in international markets, which is exactly what SoftBank loves to back.
Online entertainment is evolving as an immersive experience. As such, the demand for creator-driven content has increased exponentially. Nahoko Hoshino (a senior investor at SoftBank Investment Advisers) said in a statement. StreamElements provides a suite to broadcast and engage tools that help creators create a richer experience for their audiences, while monetizing the content of social media platforms. This creates a new digital market between creators, fans, and we are thrilled to work with them in building engagement across a growing global community.
It will be interesting to watch how StreamElements develops in the long-term, as well as whether or not it decides to invest on its own streaming platform or if it acquires one of the major ones.
Hirsch stated that we are more focused on ubiquity rather than being associated with one platform. We see transcendent creators to be the future. It is a person whose personal brand has more power than any single platform. Oprah is a prime example of achieving transcendence through her magazines, television networks, and other media. All of these have been successful because of her name, more than the medium. It means sacrificing the security of exclusivity contracts and putting your faith in your brand's success to be transcendent. Marketing is about frequency and reach. Therefore, spending too much time on one platform to build a community is not the best way to achieve a larger audience.
