Backed by Softbank, StreamElements Raises $100 Million to Boost Influencer Economy on Twitch, YouTube
When the pandemic forced entertainment to go virtual, it created a crush of rookie influencers on Twitch and YouTube looking to cash in on the creator industry.
StreamElements, an Israeli streaming services company with leadership based in Los Angeles, picked up steam by measuring that streaming content for free. The company's platform usage grew 233% over the last year, largely catalyzed by the pandemic.
On Wednesday it raised $100 million led by SoftBank's Vision Fund 2. The funds will help it to build out its platform, add to its troves of data on streaming and recruit more streamers to join its steadily growing count of users.
"Because of the quarantine mandates, entertainers flocked to live streaming platforms to connect with their fans," Hirsch said.
The pandemic spurred the growth of live streaming on platforms like Twitch, which surpassed 2 billion hours watched this year. Non-gaming content on Twitch also continues to attract more viewers, and since 2020 people have tuned into over 4 billion hours of non-gaming related content. YouTube Gaming reported it had over 40 million active gaming channels streaming regularly and surpassed 100 billion hours watched last year.
"One of the other big changes is that brands are now coming to us to coordinate sponsorship activations rather than us having to educate them about the market and our role in it," he said.
StreamElements reported that 1.1 million creators use its broadcasting and monetization services, up from "a couple hundred thousand users" a year ago. The company added that 60% of its top creators (people with over 20,000 views) use its broadcast tools but none of them pay to do so – the service is free. Instead, the company makes money by taking a cut once it connects brands to influencers for sponsorships.
But its fate is tied to the success and strategies of streaming platforms like Twitch and YouTube, where it measures content.
And it's not alone. Texas-based Restream operates a similar model for creators to get monetized, and so does San Francisco-based StreamLabs. Santa Monica-based Mobcrush is also a player in this space, but it focuses on gaming and live streaming exclusively on mobile devices, contrary to StreamElements' focus on all devices.
StreamElements offers its streamers the ability to earn donations through its platform while they're live, and it doesn't take a cut – though they do take a percentage of merchandise sales facilitated through the platform.
"As a creator-first company, our goal is to help them make money rather than making money off them," CEO Gil Hirsch said. "We never take a cut from their tips when they use our tipping service."
The round brings StreamElements' funding to roughly $111 million since its 2017 launch, according to PitchBook Data Inc. New investors MoreTech Ventures and PayPal Ventures also joined the round, along with existing investors State of Mind Ventures.
The raise also comes with a shake-up in the executive suite. Co-Founder Hirsch took over as CEO from co-founder Doron Nir, who will now serve as the company's president and focus on building out the U.S. business.
StreamElements also named Yuval Tal as chief operating officer, Jason Krebs as chief business officer, and Udi Hoffmann as CFO. The company has offices in Culver City, but is operating remotely for now.
Hirsch said the funding will mainly be used to expand StreamElements to other platforms and focus on analyzing the video-on-demand market, a newer area of focus for the company.
"This type of focus requires a larger workforce so extensive recruiting comes with the territory, including ensuring we have best-in-class executives to lead the charge," Hirsch told dot.LA.
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As TikTok and YouTubers become the go-to brand spokespeople, companies are looking to use data to figure out which influencers are worth their money and how to best convert their fans to consumers.
CreatorIQ, which raised on Tuesday $40 million to build out its brands and influencer software, uses artificial intelligence to determine how engaged social media stars are and with which audiences.
CreatorIQ chief executive Igor Vaks said the funding is a key part of building out an accurate analytics platform that can track an influencer's true impact. It's easy for social media analytics to be inflated by bot accounts or duplicate followers, and Vaks wants CreatorIQ to develop technology that will get as accurate of a read on someone's social footprint as possible.
"The advancement of measurement in the category - especially around sales and media effectiveness - is critical to the business goals of progressive brands," Vaks told dot.LA. "With this funding, we'll continue to evolve our attribution models, measurement capabilities, and social commerce features in order to both meet today's needs and drive tomorrow's evolution."
CreatorIQ competes with a number of firms on the West Coast that are in the influencer marketing data business, including Santa Monica-based Tagger and Grin, a similar firm based in San Francisco. Influencer marketing is quickly becoming more popular, and Statista reported that between 2019 and 2021 the market size nearly doubled -- by the end of this year the market share is expected to hit $13.8 billion.
The Culver City-based company has raised $80.8 million since its 2014 launch. CreatorIQ has roughly 300 clients, including big-box brands like Sephora, Salseforce, Disney and Unilever.
CreatorIQ's platform is currently used in 65 countries and it's compatible with global social media platforms like YouTube, TikTok, Weibo, Line and Instagram. The platform uses artificial intelligence to monitor engagement on posts in ad campaigns and keeps detailed data on influencers, including their follower count. This data is valuable: along with other factors, it helps the company's clients decide which spokespeople and audiences to target for marketing campaigns.
Following a 2019 funding raise worth $12 million, CreatorIQ promised to take steps to make its data more accurate and said it created that could separate duplicate followings and weed out fraudulent accounts following its influencers.
"We developed proprietary technology to determine the integrity of a creators' following that allows advertising partners to identify creators with authentic audiences, and get an accurate look at what percentage of that audience is truly engaged with them," Vaks explained.
Vaks said consumers are more likely to respond favorably to an ad if it comes from a person they view as a trusted source. Basically, it pays to have personality.
"It's about trust and affinity. Anyone, not just younger audiences, is more likely to engage with recommendations from a trusted source over a traditional ad," Vaks said. "That's why it's so important for brands to develop authentic, symbiotic relationships with creators and work together to reach a shared audience."
Social platforms like Facebook and its subsidiary Instagram as well as YouTube and Snapchat are beginning to open up their creator marketplaces to influencers who want to take full advantage of selling in-app. TikTok is getting in on the hustle too, and announced in August it would let marketing companies also integrate with its data beginning this month.
Unilever is both a client and a backer of CreatorIQ; it bought in during the startup's March 2019 Series B funding round worth $12 million and also contributed funding to this round. New investor Silver Lake Waterman joined this round, along with existing backers TVC Capital, Affinity Group and Kayne Partners Fund, a private equity division of Mid-Wilshire-based Kayne Anderson Capital Advisors.
"Influencer marketing is a key area of opportunity and differentiation that brands and agencies are eager to address with next generation analytics and automation," Silver Lake Waterman managing director Shawn O'Neill said in a statement Tuesday. "CreatorIQ's strength in data analysis and management is driving its leadership position and we are excited to partner with them to help drive their continued growth and market adoption."
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Influencers use all kinds of tricks to earn a living from their massive collection of fans, but YouTube and TikTok influencer Piper Rockelle knew she stumbled onto something special with a feature that her fans loved. She's now turned it into an app.
The 14-year-old was taking selfies in her bikini and posing in crop tops sipping on a Philz coffee for her 6.1 million TikTok and 8.3 million YouTube followers, blurring the images out, writing "rare" on them, then posting them to social media asking people to join her fan club.
"I was inspired to create this app because ever since I started posting my Rares, my followers really seemed to be engaged with them," Rockelle told dot.LA in an emailed statement.
Influencer Piper Rockelle
The social media star hopes like many others to cash in on the creator economy. Last month she released a debut video for her song "Yesterday," but she's best known for her videos on the latest fashion trends as well as so-called challenges and pranks such as "last Youtuber to freeze wins."
The videos have garnered criticism for encouraging youth to engage in harmful and inappropriate behavior. In August, pop star Pink accused Rockelle's mother, who helps her set up shots, of exploiting her young daughter.
But as her social media fan base grew, she caught the eye of Koji founders Sean Thielen and Dmitry Shapiro.
The two launched Koji five months ago as a web-based platform to help social media influencers monetize their audiences, signing on 50,000 creators including Loren Gray, Randi Zuckerberg, and of course, Piper Rockelle.
The San Diego-based startup is a web-based app store that offers "mini-apps," a work-around from Apple store or Google Play, both of which have been accused of monopolistic practices. Last month, Apple made changes to its store after settling a lawsuit for $100 million brought by small app developers alleging that their pricing tiers and purchase offerings were monopolistic.
Rockelle's latest venture is akin to the unboxing phenomenon that YouTubers made popular. A "rare" is an image or video that can be unlocked via a password, through quiz questions or with money. The creators can add stickers, text or pixelation over the blurred out images through the app.
It launched this week on Koji's platform, which has garnered $16 million in venture funding, including backing from former Disney CEO Michael Eisner. The startup recently brought on Dreamworks' former head of global interactive Annie Morita as its chief operating officer. Morita most recently led Apple's expansion efforts in China.
"We want to bring that same innovation that app stores brought to the phone, we want to bring that to the creator economy," Shapiro said.
One of Koji's key features is its "Link in Bio" feature, a term borrowed from Instagram, which famously doesn't allow more than one link in user profiles, so companies like Linktree seized on the opportunity to create a work-around, allowing users to include multiple links through their site. Koji's "Link in Bio" similarly lets the platform's web applications connect to creators on TikTok, YouTube and other social media platforms.
Koji hosts over 100 apps, most of which let creators make money via donations or selling personalized video shout outs.
Any time a developer publishes an app on the Koji App Store, they can set the fees for other creators to use their app.
Rares' fee is 15%. When other creators use the app on their link in bios and make money from it, they keep 85% of the earnings. The remaining 15% is split between the developer and Koji.
Koji boasts that some of its creators have already made over $15k from the mini-apps on their link in bios.