Next Entertainment has raised $25 million to take a business that works well in China and moving it to the rest of the world: hyperlocal live broadcasting.
The company raised the money from FunPlus, a Chinese mobile game maker that was acquired last year for $1 billion, and Inke, a Chinese company that has established a successful livestreaming platform based on localized talent. Other investors include GSR Ventures, Mayfield, and Signia Venture Partners.
Andy Zhong, CEO of FunPlus, will also serve as the CEO of Next Entertainment, which is based in Beijing. In an interview with VentureBeat, Zhong said that Next Entertainment will take Inke’s business model and try to execute it in the rest of the world. Inke has been one of China’s fastest-growing tech companies, growing quickly to a $1 billion run rate in revenues. With Inke, viewers can send virtual gifts to hosts through in-app purchases. Market researcher App Annie shows that Inke has broken into the top 50 grossing apps on a worldwide basis.
“There’s been a lot of buzz around Meerkat and Periscope in the West,” said Tim Chang, managing director at Mayfield, in an interview. “But companies like Inke have grown fast with monetized livestreaming. In the past, Chinese took a U.S. business model and made it work in China. But in this case, we have Chinese company’s business model that could work in the rest of the world.”
With Inke, livestreamers often do live performances such as singing or talking in a very funny way, Zhong said. The audiences are building quickly around local performers because Inke has a “nearby” feature that shows you which performers are in your own neighborhood or region. That nearby feature is something that Next Entertainment is going to adopt for livestreaming in the West, Zhong said.
Zhong said the company hasn’t decided the exact markets it will tackle yet. It could target vertical markets, but he said Next Entertainment will likely stay away from gaming, where Twitch is dominant, and music, where Musical.ly rules. But Zhong believes that Next Entertainment will have an advantage with its nearby feature and its business model of virtual gifts. Next Entertainment’s mobile app is called MeMe. It launched in Taiwan in November, and it will launch elsewhere in 2017.
While the focus will be in the Western expansion, Zhong said the company will be a global live broadcasting company.
“You have a proven founder like Andy, who has a billion-dollar exit behind him, and you can put this team together to work on an all-new business model that succeeded in China and could now explode in the other direction,” Chang said. “As far as monetization goes, you can think about this as digital tips for performers who have hyper local appeal. If you bid high enough, you might be the preferred fan or the one who gets to make a request. It mimics real-life behavior at clubs, where you buy someone a bottle of champagne at a club.”
Next Entertainment has 30 employees, spread through Beijing, Taiwan, and San Francisco. Zhong said that FunPlus was acquired by Century Holdings for almost $1 billion earlier this year.
“As an investor in Inke we saw its incredible growth in China,” said Richard Lim, managing director at GSR, in a statement. “Their partnership with a proven east-west entrepreneur like Andy is very exciting, and we’re thrilled to be able to work with them both again.”