M17 says it’s now profitable and growing after aborted IPO

M17 Entertainment Group, the Singapore- and Taiwan-based social media startup behind dating app Paktor, has hit topline growth of 70% over the past 12 months and has been profitable so far this year.

M17 is set to hit US$323 million in annualized revenue this year, as well as US$323 million in annualized gross merchandise volume (GMV) from its “live and social commerce” business, said Phua. The method for deriving these annualized figures wasn’t disclosed.

He told Tech in Asia that the projected net revenue figure relates to M17’s entertainment unit, including livestreaming, dating, and advertising, which generate income through subscriptions, sponsorship deals, and virtual gifting.

M17 CEO Joseph Phua at the official launch of the company’s new HandsUp service / Photo credit: M17

The GMV figure is separate and comes from M17’s services unit. It includes transactions handled by the company’s ecommerce platform, its cosmetic and fashion lines developed with its social influencer network, and from its influencer merchandizing business, which helps influencers sell their own products. These generate revenue via a mix of subscriptions, GMV cut, and margin on sales, though Phua clarified that these have not been factored into M17’s overall revenue projections.

The company didn’t provide specific figures for its third business unit, which is named “content investments.”

Phua said that M17’s most recent annual and quarterly profit, loss, and revenue figures “are not public at the moment.”

The supposed turnaround comes almost a year after M17 withdrew its application to list on the New York Stock Exchange. The company had originally priced its IPO at US$115 million, before dropping the raise target to US$60.1 million during its roadshow.

The IPO was halted on the day shares were supposed to begin trading, with M17 saying the process had been indefinitely suspended “due to issues related to the settlement of American depositary shares by specific IPO investors.”

See: Paktor’s parent company files for $115m US IPO. It faces a challenging future

The company subsequently raised US$35 million in private funding from existing and new investors including Convergence, Global Grand Capital, Infinity Venture Partners, and Majuven. It secured a further US$25 million from investors including Pavilion Capital, a subsidiary of Singaporean sovereign fund Temasek, last December.

Phua told Tech in Asia that M17’s change in fortunes has been driven by putting more resources into business units and geographies offering a higher return on investment, as well as “stellar performance” by units with strong margins.

“The company is past investment phase in key markets and is reaping the benefits of market leadership in, for example, Japan and Taiwan, where we have over 50% market share by revenue,” he added.

M17 revealed its latest projections as part of the official launch of its new “B2B live and social commerce” service, HandsUp.