Video is at the heart of how people use the internet today, and creators are at the heart of what is being made and watched on video. Today, a startup that has built a platform that helps them produce and monetize their work is announcing a big round of funding that underscores just how lucrative and big the creator economy has become.
StreamElements, which provides production and analytics tools to people who livestream and make video-on-demand for platforms like Amazon's Twitch, YouTube and Facebook, has raised $100 million in funding -- money that it will be using to continue building out the tools on its platform, to do more in on-demand alongside a big business in livestreaming and for marketing, specifically to bring more creators to its platform, which is already being used by 1.1 million people.
"Our goal is to be everywhere creators are, which means expanding to new platforms, such as using the new funds to build out our presence on Trovo," said co-founder Gil Hirsch. "It also means going beyond the livestreaming space and bringing our proprietary audience experience-driven technology to YouTube videos where we are creating some industry firsts."
The company competes against a wide swathe of others in the so-called creator economy, including many of the video platforms themselves building their own production and monetization features, so the race for more talent is not a small one.
In keeping with that, to sharpen up their business focus, alongside the funding news, the Tel-Aviv/Los Angeles-based company is also announcing some significant executive changes. Co-founder Gil Hirsch is taking on the role of CEO, with co-founder Doron Nir (who had been the CEO up to now) moving over to president. Yuval Tal as COO, Jason Krebs as CBO and Udi Hoffmann as CFO are rounding out the executive bench. (The other two co-founders are Or Perry and Reem Sherman.)
SoftBank Vision Fund 2 is leading this latest round, which also includes new backers PayPal Ventures and MoreTech, as well as previous investors State of Mind Ventures, Pitango, Menorah and Mivtach Shamir.
StreamElements is not disclosing its valuation, but this round is coming in the wake of very strong growth for the company, after a prolonged period where user-generated video consumption went through the roof. That was not just because of the popularity of apps like TikTok, Instagram, YouTube (now with 40 million gaming channels, among other content) and Twitch (which passed 2 billion hours of watched video in January 2021), but also because video became a pastime and lifeline for many people after other activities and sometimes even movement outside of the house became restricted after the rise of COVID-19.
"The pandemic had a massive impact on our business," Hirsch said in an emailed interview with me. "In addition to people in quarantine watching more content, more people started creating it. We know this because our monthly users went from a couple hundred thousand before the quarantine and less than a year later it is now over a million. In addition, brands had to move their marketing spends from in-person events to digital campaigns with livestreamers becoming more appealing as a promotional vehicle. As a result, we regularly hear from major brands more frequently about coordinating influencer-driven sponsorship activations since that is our specialty."
In the case of StreamElements, the company said usage of its platform grew 233%, and it has especially seen some strong traction with some of the more popular creators. It said that over 60% of the top content creators -- those with 20,000 or more views and followers across multiple platforms -- use the StreamElements dashboard.
While StreamElements has made its name up to now mostly with livestreaming and working with, say, gamers on platforms like Twitch to help them produce content, manage conversations and build in ways of making money, it's now looking to focus more attention on video-on-demand, the company said -- an area where it had already provided some services but will be doubling down to address what it sees as an untapped opportunity, especially in contrast to livestreaming.
“YouTube currently has over 40 million active gaming channels, making it the largest gaming platform in the world,” said Hirsch in a statement. “The bulk of this content [is] on-demand videos, which lack the real-time engagement functionality that has driven the success of the livestreamed market. We are focused on infusing on demand videos with dynamic interactive features to strengthen the communities around this type of content.”
Notably, currently, StreamElements' creator tools are 100% free to use, so as Hirsch described it to me, "The primary way we generate revenue is through brand partnerships. We offer influencer-driven sponsorship activations that rely on our proprietary technology which already powers the majority of the top creators’ channels and enables unparalleled depth in terms of the measurement brands are looking for." This is one reason why the company is going to focus on bringing more of these high-volume creators to its platform. Currently, he said the majority of its creators are based in the U.S., Europe and Brazil, although the aim will be to continue to tap more people in more markets internationally, a mass market play that is exactly the kind of business SoftBank likes to back.
“As online entertainment continues to develop as an immersive experience, the demand for authentic creator-driven content has grown exponentially," said Nahoko Hoshino, a senior investor for SoftBank Investment Advisers, in a statement. “Through a suite of broadcasting and engagement tools, StreamElements is helping creators deliver an enriched experience for audiences while monetizing content from the most popular social video platforms. This creates an exciting, new digital market between creators and fans, and we’re thrilled to be working with the company in building engagement across an ever-widening global community.”
Longer term, it will be interesting to see how and where StreamElements develops, and whether it chooses to invest in its own streaming platform, or indeed if one of the big ones acquires it.
"We are more focused on ubiquity than being aligned solely with one platform because we see transcendent creators as the future," Hirsch said. "This is a person whose personal brand is more powerful than any one platform. Oprah is an example of reaching peak transcendence with her magazines, a television network, and more, all of which have succeeded because of her name more than the medium. To be transcendent, it means giving up the security of an exclusivity contract and betting on your own brand for success. Marketing is all about reach and frequency, so spending all day building a community primarily on one platform is not optimal for achieving that larger presence."