“Put away your phone,” every mother in the world has said this line at least once in their lifetime. As the technology continues to boom, the platforms continue to become more interactive. High-speed Internet and evolving technology have provided users with a feature to go live at any given moment. It seems that live-streaming has been a popular medium of connecting with audiences for creators. This has been a long-developing phenomenon in India, as the youth has been drawn towards live-streaming features on Instagram, Facebook, and YouTube. As per an EY report, dating, social media and entertainment were the top consumer spending categories in 2023 of which live-streaming garnered approximately $19 million.
The company recorded a total income of Rs 2.07 crore in FY23. However, the company recorded a net loss of Rs 43.37 crore in the same year, as per regulatory filings accessed by Tofler. In a conversation with BrandWagon Online, Saurabh Pandey, founder and CEO, Eloelo, talks about the company’s marketing strategies, trends in the segment, deployment of funds and subsequent net loss as well as the platform’s content guidelines, among others. (Edited Excerpts)
The company recorded a total income of Rs 2.07 crore in FY23. However, the company recorded a net loss of Rs 43.37 crore in the same fiscal. What have been the reasons for the loss?
Social products, in general, take some time to monetise because you need to build trust. You also need to build certain products which are industry-first in the space. For example, apart from real-money gaming, nothing was monetised in in-app purchases for casual games. We believe that live-streaming will be the next big needle movers, where large billion-dollar outcomes are going to be built. We are building a business where one needs to build tech. In our case, the mentioned technology is built on three things.
Firstly, the live streaming is running on a lag of less than two seconds which is at par with Hotstar. Building this takes time. Secondly, adding an interactive layer on top of live streaming has never been done globally before. We’ve added games such as Tambola, Chiddiya Ud, musical chairs, snakes and ladders, and 20 other games. We further added virtual gifts which you can store but won’t have an impact on the app size. Eloelo can run on version six of Android since we want our apps to be available on lower-end devices or old devices as well. Lastly, we had to ensure our product was clean. We had to ensure that the product had the best artificial intelligence (AI) model to ensure that every minute had been passed into frames. We spent the last 2.5 years building and experimenting. It is in the last two to three months that we started with monetisation, and I think that will cover up very quickly. While it is early to comment on when we will break even, I am hoping we break even in the next two years.
What is the company’s business model?
The business model is built on gratification. While there are two to three parts to the business model, we are currently operating on one. The product is free. The user can enter any live stream and watch it. If the user wants to engage with a streamer then can join the live stream as a co-streamer, comment on certain live streaming or opt for an entrance effect in the live streaming, with products that we have added as a layer of monetisation. Users can send virtual gifts to a host.
Users enter the platform and buy diamond packs, these packs are in a paid currency. The pack ranges from two rupees to Rs 3,000. We have people from both ends of the spectrum. The user sends diamonds, prompting the host’s gratification and asking them to join the live stream. Users join the live stream, chat and make new connections, while the platform essentially earns a margin. Case in point: If a user has Rs 1,000 in the live stream, the platform keeps 30-40% of it, depending on the creator while the rest goes to the creator. There is no requirement for licenses, no fixed costs or low fixed costs. The business model is very asset-light. We intend to add layers on top such as the introduction of games, monetising game companionship, and audio calls between creators and users, to name a few future initiatives.
What are your marketing strategies for the current fiscal year (FY25)?
We are growing at 200% year-on-year (YoY) and our growth has been based on a lot of organic pull and marketing campaigns. In terms of marketing, we have three strong focus areas. Firstly, we see traction in non-Hindi-speaking belts such as Bengali, Marathi, Tamil, Telugu, Gujarati, and Punjabi. We’ve recently launched Malayalam as well. We are actively marketing in these areas, along with local creators to build the brand. The idea behind our marketing in those areas is that demand and supply need to come from these belts.
Secondly, there are categories that we are introducing to the segment. We have a MALT (motivation, astrology, love relationship and talent) framework. We are spreading the word on the categories that exist within our platform such as the timings of our IP shows and which creators are live, among others. We want to promote our platform and we intend to do it through a combination of getting influencers and content creators on our platforms. We recently had Munawar Faruqui on our platform and he spoke about Shayaris, love and motivation. We keep hosting such events to push the envelope in terms of category marketing.
Lastly, we want to create awareness for content creators on live streaming being a legitimate way of connecting with audiences and monetisation. While creators monetise through ad revenues on YouTube, the only other avenue is live streaming platforms. We are going to do creator acquisition campaigns along with awareness campaigns.
Live streaming has been a relatively new phenomenon. What are the trends that the segment has witnessed over the years, and what are the categories that exist in the segment?
This category has become a revelation in China. The products have monthly active users (MAUs) of more than 300-400 million. Live streaming has become a way of communication in certain geographies across the globe. Globally, the market is valued at $47 billion which you can divide into three genres. One part of it is commerce-led where content creators or users are selling something to other users live, similar to video commerce TV channels such as Star CJ and Asian Sky.
Second is social live streaming which is something that we do here at Eloelo. Typically, the live streaming is portrait live and not landscape live. The third type of live streaming is game streaming. Game streaming has been made popular by platforms such as Twitch, YouTube, Kik, and Rooter. Game streaming is not a focus area for us because we believe while there is an audience for the genre, it is best consumed on a laptop. After all, the genre demands large screen consumption. We believe that India is truly mobile and the consumption will happen on the fly. I believe social live-streaming has the maximum potential, and I think it will solve a fundamental human need of belongingness and communication.
While there are multiple social media apps which allow a user to like, share and comment on a certain piece of content, users don’t have much interaction. There are a few players in the space such as ShareChat and FRND who are solving the social live-streaming issue and solving it from different angles.
You raised a pre-Series B fund of $22 million recently. How do you intend to utilise the funds?
We raised $22 million from Griffin Gaming and Courtside Ventures. Our existing investors, including Kalaari and Waterbridge Capital, also doubled down on the investment. There are broadly three large use cases for which we deploy capital. Firstly, it has been technology. It spans from tech hiring to built-in-house technology, moderation engines, and games which take effort as well as some capital.
Secondly, we are a growing company so we do a lot of campaigns. We’ll keep partnering with other companies, on the creative side and the user side. To ensure we have the right demand-supply mix across languages, we spend on creative acquisition and user acquisition. We invested when we launched a new language since the demand initially was limited.
Lastly, we spend on our manpower in terms of acquiring the best talents possible. We are about a 145-member team and our burn rate is fairly lean as compared to our scale. We raised the funds to ensure we have more risk-taking ability since there is more appetite to take risks if there is capital available, but we’ve been frugal in terms of how we want to operate and run the business.
What are the content guidelines for Eloelo?
We filter the content out at the source. A user cannot create a live stream on Eloelo, until users have a certain number of followers. Our platform is all about live streaming which makes it hard to gain followers and for that, a creator will initially have to be a commenter or a co-creator in someone else’s livestream. The platform appreciates good behaviour.
Secondly, the minute that a user goes live, we like to add context. A creator has to pin a comment where they need to add an agenda for the live stream. Every string that a creator types will be moderated. The creator cannot type something which beats the system because our AI models will detect that. Additionally, as soon as a creator goes live, the creator has to accept our terms and conditions which include no drinking, no smoking, no vulgar content and no abusive content, among others. The app is as per Google’s policies and it is open for anybody who is above the age of 12.
Lastly, we encourage creators or users to host games inside live. We encourage creators to gratify users who are gifting virtual gifts. The product is built where a creator can assign a family member. My inspiration to have a community-like atmosphere on the platform comes from Discord. We have a 50-50 split between audio live streams and video live streams.
Case in point: If there is a 60-minute livestream, we’ll divide the stream into 6,000 frames, and cut each into 100 frames. We send these frames to our AI model, which will then flag off any behaviour that is not right. We ensure that content on our platform continues to be clean by preventive and curative moderation.