New TikTok Alternative Raises $1.3M - Livestream App Gaining Popularity

Social Media Shifts and the Rise of Favorited

Recent events have highlighted volatility within the social media landscape. TikTok experienced a temporary outage in the U.S., followed by its swift restoration.

Instagram has also encountered criticism due to the discontinuation of its third-party fact-checking initiative.

Favorited Secures Pre-Seed Funding

Amidst these developments, new platforms are gaining traction. Favorited, a burgeoning livestreaming app, has successfully secured $1.3 million in pre-seed funding.

This investment signals growing interest from both investors and content creators.

How Favorited Works

Favorited’s functionality is closely aligned with TikTok Live, focusing on real-time creator-follower interaction. The platform incorporates features like gifting, interactive games, streaks, and leaderboards.

The gifting system mirrors that of TikTok Live, enabling viewers to send virtual presents during livestreams, purchased with coins acquired through real-money transactions.

A Competitive Revenue Model

A key differentiator for Favorited is its creator-centric revenue split of 70/30. This potentially offers a more advantageous arrangement compared to TikTok’s approximately 50% share.

To initiate their own broadcasts, users require a minimum of 100 followers, though anyone can participate in existing streams. Within these streams, “battles” and collaborative events provide opportunities for self-promotion and follower acquisition.

The Team Behind Favorited

Favorited was established last year by David Tesler and Zach Ferraro. Ferraro brings prior experience from companies including Curiosity.com, Famous Birthdays, and Fourthwall.

The founders are dedicated to enhancing livestream engagement through gamification, believing interactive and collaborative experiences represent the future of digital content.

The Vision for "Real Social"

“Real human interaction is synchronous, real-time, and face-to-face, and our platform enables that at scale,” stated Ferraro in an interview with TechCrunch.

He further expressed a desire to move beyond passive “doom-scrolling” and usher in an era of genuine social connection.

A Competitive Livestreaming Market

This funding round takes place within a highly competitive environment for livestream monetization. Whatnot, a platform for livestreamed sales, recently secured $265 million, achieving a valuation of $4.97 billion.

RedNote, a Chinese livestreaming alternative, recently reached the number one position for free apps on the U.S. App Store.

Early Success and User Growth

While it remains to be seen if Favorited can compete with established platforms, its initial performance is promising. The app has already attracted significant investment in a crowded market.

Currently, Favorited boasts 1.3 million users, with reports indicating that creators like Jaysingzs (a TikToker) have earned over $40,000 in a single month through the platform.

Investors and Team Expansion

The funding round included participation from HF0, Soma Ventures, and various angel investors from the entertainment and social media sectors.

Favorited also completed the a16z Speedrun accelerator program. The new capital has facilitated the expansion of the company’s team from 10 to 20 employees, focusing on product development.

Future Plans and Revenue

The company intends to pursue global expansion and is exploring potential partnerships with strategic investors for further funding, though Ferraro indicated this isn’t immediately necessary.

Favorited reports generating over $4 million in monthly revenue, and creators on the platform received more than $2.5 million in gifts within the last week alone.

Favorited is available for download on both the App Store and Google Play Store.

Note: This article was updated to clarify that Andreessen Horowitz did not directly invest in Favorited, but rather the company participated in the a16z Speedrun accelerator program.