Esports platform invests in media group targeting millennials

The Grvty Media team. Photo credit: Grvty.

Facebook is gobbling up the media industry, but at least one investor thinks it’s still worthwhile to invest in content creators.

Singapore-based Grvty Media, which is a collection of media products targeting millennials, announced that it has raised S$1 million (US$727,000) from Spout Entertainment Group, a company that’s using a unique blend of technology, media, and talent management to nurture esports in Southeast Asia. Spout owns 27.7 percent of Grvty after this deal.

The three-month-old startup is profitable from day one, says co-founder and managing director, Jacky Yap. The entity makes money via branded content and agency work, in other words, creating content for other channels.

Grvty’s portfolio includes Vulcan Post, which covers tech and digital lifestyle news for consumers, as well as sites that cover travel, fashion, entertainment, and profiles of interesting millennials (their website has more information).

Vox + Buzzfeed for Asia

Yap is shaping Grvty in the style of Vox, a US media company that operates many different media brands in various verticals ranging from sports to politics to technology. It’s also influenced by Buzzfeed, which employs a strategy of reaching out to its audience via a multitude of channels, without necessarily driving readers back to its main website.

Combined, Grvty claims to have reached 20 million individuals in May organically (50 percent month-on-month growth in the past three months), though that number adds up Facebook reach and pageviews from its websites. So the unique viewers would be lower than that. However, according to Facebook’s definition, reach is simply the number of people that are exposed to the content on the News Feed. It doesn’t indicate engagement.

Most of its traffic is driven by social videos, and comes from Millennials of Singapore (MoS) and Vulcan Post. Yap did not disclose April and June figures. However, a look at MoS’ Facebook page suggests that May saw a huge spike with 2.6 million video views, compared to 400,000 in June and 991,000 in April.

Together, Spout and Grvty claim to have 30 million unique visitors a month. Spout is pretty new, at less than a year old. It raised a US$2.1 million seed round in April 2017, and said it would invest US$600,000 in Myanmar.

Yap founded Vulcan Post in 2014. The company then created Parrot, a Buzzsumo-like tool to discover viral content on the internet. He says this tool is Grvty’s competitive advantage, allowing it to sniff for content ideas that’ll resonate with its audience. When asked on the difference between Parrot and Buzzsumo, Yap says Parrot focuses on Southeast Asian publications.

There’s been a spate of investments in online media properties lately. Reapra, an investment group founded with US$100 million in personal money from Japanese entrepreneur Shuhei Morofuji, has backed ventures like Spout and Inc Southeast Asia. Meanwhile, Malaysian giant Media Prima bought digital media company REV Asia for US$24.2 million.

Analysis

Media businesses in Southeast Asia face huge challenges compared to other regions. The US and China have huge homogeneous markets which make both advertising and subscription models attractive. Consumers in those countries, by and large, are more willing to pay for content. India, on the other hand, faces the challenge of low average revenue per user, but its sheer size offsets that somewhat.

As for Southeast Asia, it isn’t just fragmented in terms of population, but also language. To cater to a broad swath of the population would require more investments in localization and distribution compared to other regions – which sounds like exactly what Spout is trying to do. “All of Spout’s rungs are climbing to a very lucrative destination: owning viewership in Southeast Asia,” founder Daryl Teo tells Tech in Asia.

The challenges, however, also means whoever can build a truly regional online media will have a moat that’s hard to overcome.