17Live, Singapore’s first SPAC target, shrinks revenue as price of profit rises

Livestreaming firm 17Live reported a big gain in adjusted EBITDA for the first half of this year, matching its adjusted earnings for the whole of 2022.

However, the company experienced a decline in revenue for the period. The figure stood at US$151 million, down 25% from H1 2022.

Previously known as M17 Entertainment, 17Live was founded in 2017 through the merger of app developer Paktor Group with livestreaming firm 17 Media. Vertex Technology Acquisition Corporation, the special purpose acquisition company of Singapore’s Vertex Holdings, announced a merger deal with 17Live to bring it public.

Alex Lien, group CEO of 17Live, tells Tech in Asia that the firm is currently focused on growing faster. Its upcoming IPO will also give it the capital to bankroll this expansion effort.

Lien says the growth in H1 profits came off the back of a shift in strategy for 17Live to prioritize profitability, which started ‌around the third quarter of last year.

Coupled with a shaky post-Covid market, the tradeoff of this shift: declining revenue.

Photo credit: 17Live

Kenta Masuda, the company’s global CFO, tells Tech in Asia that a major factor in this reduction was 17Live’s efforts to improve return on ad spend in Japan, which led to lower monthly active users (MAUs).

Total MAUs dropped by over half to 550,000 in H1 2023 compared to the same period last year. However, the percentage of those users who made transactions on the platform grew to 16.1% compared to 10.7% in H1 2022.

Masuda says that the company was previously spending a large amount on advertising, which was “not sustainable” and unhealthy for the long term. The shift in strategy has pushed 17Live’s total operating expenses down 22% to US$50.1 million for the first half of the year.

There might be further savings to be had as “there are a bunch of initiatives that we are focusing on to optimize operating expenses,” Masuda shares. These include streamlining customer acquisition and saving on marketing costs through partnerships.

The company has already partnered with several other firms to reach a wider audience, such as a professional basketball team as well as several gaming companies.

“They saw that by working with 17Live, working with our streamers, they provide traffic for each other,” Lien says.

Masuda adds that 17Live is gearing up to deepen its market penetration in Japan’s second-tier cities as well as to bring its services to Southeast Asia.

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