The startup – 70 percent owned by Chinese mobile app company Cheetah Mobile – announced a US$60 million series A from Matrix Partners China, IDG Capital, Gobi Partners, Cheetah Mobile, and others on Monday. The live streaming service will use the new funds for research and development, as well as improving its overseas operations. Currently, the app has users in the US, the UK, Canada, and Australia.
“Matrix Partners has always watched for opportunities in social networking. We believe that the US and other overseas markets have a huge demand for social live streaming,” stated Wang Huadong, co-founder of Matrix Partners China, in a press release. “We look forward to even more progress from Live.me’s team going forward.”
Last year, China’s live streaming market reached a fever pitch, growing 180 percent year-on-year to reach US$3 billion, according to research firm iResearch. Unlike Western equivalents, such as Periscope and Facebook Live, China’s live streaming market is characterized by virtual gifts – from digital lollipops to Ferraris – which are a way for both hosts and live streaming platforms to monetize dancing, singing, eating, or even idle banter.
So far, it seems like a lucrative model. Chinese social networking app Momo has leveraged live streaming with enormous success, for instance. In Q4 of last year, Momo’s revenue jumped 524 percent year-on-year to US$246.1 million. Top-notch live streaming hosts can make as much as US$20,000 a month, though normal full-time hosts typically make about US$500, according to China Tech Insights.
Cheetah Mobile’s Live.me wants to take virtual gifting to overseas audiences, especially for Western internet celebrities and their fans. The live streaming app counts Vine and Snapchat star Amanda Cerny, as well as Youtube celebrities Anthony Quintal and Roman Atwood, among its digital influencers. Last October, the live streaming app said it processed a total of US$1 million in virtual gift payments seven months after launching last April.
However, Live.me isn’t the only company outside of China to do so. Shanghai-based startup Musical.ly also has its own live streaming equivalent called Live.ly, which launched last year. It too lets users reward hosts with virtual gifts and has even incorporated another feature popular in China called dan mu, floating comments that scroll across the screen.
Western juggernauts such as YouTube, Facebook, and Periscope will also be nontrivial contenders, as each doubles down on live streaming as a way to monetize content creators and web stars.