This month, drama unfolded across mainstream social media platforms like TikTok, which briefly went dark in the U.S. before a rapid return. Instagram recently faced backlash after ending its third-party fact-checking program.
At the same time, startups like Favorited are attracting attention from investors, creators, and viewers. On Wednesday, the livestream app announced its $1.3 million pre-seed funding round.
Favorited closely resembles TikTok Live as it aims to enable creators to engage with their followers in real time. Key features include gifting, interactive games, streaks, leaderboards, and more. Gifting operates similarly to TikTok Live, allowing viewers to send virtual gifts during a livestream. These gifts are purchased with coins, which are bought with real money.
One of Favorited’s standout features is its competitive revenue split of 70/30 for creators, which could be more favorable than TikTok, which takes around 50%. Users need at least 100 followers to start their own streams on Favorited, but anyone can join existing streams. Within these streams, they can participate in “battles” and collaborations, which can help them promote themselves and gain new followers.
Favorited was founded last year by David Tesler and Zach Ferraro. Tesler is the creator of the anonymous Q&A app Sendit, while Ferraro’s experience includes working with companies such as Curiosity.com, Famous Birthdays, and Fourthwall. The duo says they are committed to gamifying livestreams, believing that the future of content is interactive and collaborative.
“Real human interaction is synchronous, real-time, and face-to-face, and our platform enables that at scale,” Ferraro told TechCrunch. “I think that we are nearing the end of the doom-scrolling era, and we want to usher in the age of ‘real social.’”
The recent funding round occurs amid fierce competition among various apps seeking to capitalize on livestream monetization. Whatnot, a platform where users can sell items via livestreams, recently raised $265 million, increasing its valuation to an impressive $4.97 billion. RedNote, a Chinese alternative that offers livestreaming, achieved the top rank for free apps on the U.S. App Store just last week.
It remains to be seen whether Favorited can keep up with mainstream platforms, but it appears to be performing well and has already attracted impressive investors in a competitive market. The app currently touts over 750,000 users, with users like Jaysingz (a popular TikToker) reportedly earning over $40,000 in one month while streaming on Favorited.
Those who participated in the funding round include Andreessen Horowitz, HF0, Soma Ventures, and several angel investors from the entertainment and social space. The newly raised capital has been allocated to product development and has helped the company double its team from 10 to 20 employees.
Looking ahead, the company plans to scale globally and is in discussions with strategic investors about additional external capital, although Ferraro noted that it doesn’t necessarily need it. The platform claims it’s generating more than $4 million in monthly revenue. In the past week alone, creators on Favorited were gifted more than $2.5 million.
Favorited is available to download on the App Store and Google Play Store. The platform touts 1.3 million app installs.