Stream Raises $38M to Power Chat and Activity Feeds for 1 Billion Users

The Rise of Digital Communication and Stream's Funding

A significant portion of modern interaction occurs through digital channels, and today, a company facilitating this – offering APIs for creating chat experiences within applications – has announced a new funding round following substantial growth.

Stream Secures $38 Million in Funding

Stream, a platform enabling developers to integrate chat and activity streams into apps with minimal code, has secured $38 million in funding. This capital will be allocated to expanding its current operations and developing innovative new features.

From Activity Feeds to Comprehensive Chat Solutions

Initially focused on APIs for activity feeds, Stream broadened its scope to include chat functionality. This chat feature is now compatible with applications built on diverse platforms. Currently, customers utilize third-party chatbots and integrate Dolby for audio and video within Stream, but the company aims to develop these capabilities internally over time.

Expanding Feature Set and Global Presence

“We aspire to incorporate as many components as possible,” stated Thierry Schellenbach, CEO and co-founder, alongside CTO Tommaso Barbugli, who established the startup in Amsterdam in 2015. While maintaining a substantial team in Amsterdam led by Barbugli, the company’s headquarters are now located in Boulder, Colorado, where Schellenbach relocated.

A Growing Customer Base

Stream boasts a notable clientele, including TaskRabbit (owned by Ikea), NBC Sports, Unilever, Delivery Hero, Gojek, eToro, and Stanford University. Furthermore, the company serves numerous undisclosed clients in sectors such as healthcare, education, finance, virtual events, dating, gaming, and social networking. Collectively, the applications powered by Stream reach over 1 billion users.

Series B Funding Details

This Series B funding round is spearheaded by Aydin Senkut of Felicis Ventures, with participation from existing investors GGV Capital and 01 Advisors – the venture fund co-founded by former Twitter executives Dick Costolo and Adam Bain.

Notable Investors Join the Round

The round also attracted a diverse group of new and returning individual investors, including Olivier Pomel, CEO of Datadog; Tom Preston-Werner, co-founder of GitHub; Amsterdam-based Knight Capital; Johnny Boufarhat, founder and CEO of Hopin; and Selcuk Atli, co-founder and CEO of social gaming app Bunch.

Investor Insight and Market Validation

This investor list provides insight into the types of startups collaborating with Stream.

Financial Performance and Growth Trajectory

While the company has not disclosed its valuation, it reported a 500% increase in chat revenue in 2020.

Accelerated Funding Round

This Series B round occurred just six months after a $15 million Series A raise, and Stream was not actively seeking funding at this time.

“Aydin’s offer was compelling, making it difficult to decline,” explained Schellenbach.

Strategic Investment Rationale

“They are building upon the foundational technologies that are truly impactful,” Senkut commented, emphasizing the strong return on investment reported by Stream’s users. “It’s uncommon to encounter a product so vital to customers while simultaneously demonstrating robust scalability. The potential is limitless, and we are eager to contribute to their journey.”

The Competitive Landscape of Communication APIs

Stream operates within a competitive market alongside other API-based communication service providers such as SendBird, Agora, PubNub, Twilio, and Sinch. These companies have secured significant funding, gained customer traction, or are positioning themselves as industry consolidators.

A Vast Market Opportunity

This competition underscores the substantial market potential within this sector.

Stream's Position as a Building Block for Applications

Companies like Stream are experiencing success due to the value they provide and the existing market demand for their services.

Comparison to Fintech Infrastructure Providers

The services offered by Stream can be likened to those provided by companies like Adyen, Stripe, Rapyd, and Mambu in the fintech industry.

Simplifying Complex Functionality

Similar to payments, implementing features like chat can be complex, often requiring the integration of various services and platforms.

Central Role of Communication Features in Apps

Activity feeds and messaging are integral to many applications, even if they aren't the primary function. For example, food delivery apps require chat functionality for communication between customers, drivers, and restaurants.

The Rise of API-Driven Development

The combination of these factors drives demand for companies that simplify the development process by offering pre-built, API-accessible communication services.

Focus on Peer-to-Peer Communication

Stream’s services differ from customer-service focused platforms like Zendesk or Intercom, which integrate with CRM systems and marketing analytics tools. Stream concentrates on facilitating communication between individual users.

Potential for Increased Social App Development

The availability of easy-to-integrate services like Stream’s may encourage the development of more social applications.

A Key Customer Building on Stream's API

One rapidly growing social app is already built on Stream’s API.

Challenging Established Social Media Giants

While a few major players – including Facebook, ByteDance/TikTok, Tencent, Twitter, Snap, and Google – dominate social interactions, accessible communication tools could empower new entrants with unique business models.

Industry Validation

“Stream’s technology solves a common challenge in product development by providing a scalable and easily integrated messaging solution,” stated Dick Costolo of 01 Advisors, former CEO of Twitter. “Their team and clear vision are exceptional, and we wholeheartedly support their mission.”

Updated to clarify that the revenue growth figure is not directly related to the valuation.

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