A group of investors, including former MoviePass chairman Ted Farnsworth, is set to buy an 80% stake in the Singapore video-sharing service Lomotif. They will pay about US$125 million for the stake, reported Bloomberg.
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Earlier, it had surfaced that Zash Global Media and Entertainment Corp, a firm founded by Farnsworth, had entered an agreement to acquire a controlling stake in Lomotif.
The deal is said to be one of the biggest exits by a tech startup in Singapore in recent years.
Farnsworth’s investment in Lomotif – which is considered a TikTok competitor – comes after his theater venture MoviePass burned millions of dollars before going bankrupt. The company let customers watch movies for as low as US$10 per month.
According to Zash, Lomotif has increased its average monthly community by more than 400% in the last three years. Since its launch, over 10 billion pieces of user-generated content have been used to create more than 740 million videos on the platform.
Following the deal, the Singapore-based startup will go up against Chinese apps TikTok and Kuaishou in the short-video space. Its founder and CEO Paul Yang will also continue to lead the company.
Over the next several months, Lomotif will shift to an advertising model and focus on “other means of monetization,” said Zash co-founder Vincent Butta. The short-video app is also looking to expand in the US and other countries as well, added Farnsworth.
The global video-streaming market was valued at US$50.1 billion in 2020 and is expected to increase at a compound annual growth rate of 21% from 2021 to 2028, according to a report by Grand View Research.
Update (February 26, 7:00 pm): This article was updated to add details on the deal from Bloomberg.
Update (February 27, 11:20 am): The article’s headline said the US$125 million deal was in cash. This was implied by us from the Bloomberg report. However, we’ve removed “in cash” for now as while we have reason to believe this to be true, we’d like to do additional verification first.
Editing by Collin Furtado and Eileen C. Ang
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