The drama that unfolded across mainstream social media platforms like TikTok this month briefly took a dark turn in the U.S., but has since quickly rebounded. Instagram recently faced backlash for ending its third-party fact-checking program.
At the same time, startups like Favorited are gaining attention from investors, creators, and viewers. On Wednesday, the livestream app announced a $1.3 million pre-seed funding round.
Favorited is a lot like TikTok Live, as it aims to allow creators to interact with their followers in real time. Key features include gifts, interactive games, streaks, leaderboards, and more. Gifts works similarly to TikTok Live, allowing viewers to send virtual gifts during a livestream. These gifts are purchased with coins that are purchased with real money.
One of Favorited's distinguishing features is its competitive 70/30 revenue share for creators, which could be more advantageous than TikTok, which accounts for about 50%. Users must have at least 100 followers to start their own stream in Favorites, but anyone can join an existing stream. Within these streams, users can participate in “battles” and collaborations, helping them promote themselves and gain new followers.
Favorite Image Credit: Favorite
Favorited was founded last year by David Tesler and Zach Ferraro. Tesler is the creator of the anonymous Q&A app Sendit, and Ferraro's experience includes working with companies such as Curiosity.com, Famous Birthdays, and Fourthwall. The two believe the future of content is interactive and collaborative, and say they are working on gamifying live streams.
“Real human interactions happen synchronously, in real time, and in person, and our platform enables that at scale,” Ferraro told TechCrunch. “We believe we are nearing the end of the doomscrolling era, and we want to usher in the ‘real social’ era.”
The latest round of funding comes amid intense competition between various apps looking to monetize live streams. Whatnot, a platform that allows users to sell items through livestreams, recently raised $265 million, increasing its valuation to a staggering $4.97 billion. RedNote, a Chinese alternative service that offers live streaming, achieved the top ranking of free apps in the US App Store just last week.
Screenshot image credit: Favorites
It remains to be seen whether Favorited can catch up to mainstream platforms, but it appears to be performing well and has attracted an impressive number of investors in an already competitive market. The app currently has over 750,000 users, with users like Jaysingz (a popular TikToker) reportedly earning over $40,000 in a month while streaming on Favorited.
Participating in this funding round were Andreessen Horowitz, HF0, Soma Ventures, and several angel investors in the entertainment and social sectors. The new funding was allocated to product development and the company doubled its team from 10 to 20 employees.
Looking ahead, the company plans to expand globally and is in talks with strategic investors for additional outside capital, although Ferraro said it is not necessarily necessary. The platform claims to generate over $4 million in monthly revenue. Last week alone, Favorited creators received more than $2.5 million.
Favorites can be downloaded from the App Store and Google Play Store. The platform advertises 1.3 million app installs.