On the evening of Jan 26, Singapore’s sole successful spac company, 17LIVE, declared the immediate resignation of its CEO, Alex Lien, citing “personal family reasons”. Joseph Phua, former and current CEO, admitted to the unusual announcement but assured The Edge Singapore that it was “not a surprise.”
“Of course, we expected [Lien] to continue leading the business for some time to come, so his resignation was not something we anticipated — especially within the first month into the year,” says Phua.
17LIVE only started trading on the Singapore Exchange S68 as a merged entity with Vertex Technology Acquisition Corp on Dec 4, 2023. Since trading as 17LIVE on Dec 8, its share price has dropped $1.85 to around $1.30 as of Feb 2. For VTAC investors who paid $5 for the IPO shares, that is clearly a much bigger hit.
Shareholders might not welcome Lien’s resignation so soon after the listing. “It is not something that we did not have context for. We have been aware of it for quite a while,” says Phua.
He says that as 17LIVE’s primary operations are in Japan, Lien had to oversee the company’s day-to-day affairs distant from his family in Taiwan. This translates to numerous sacrifices made by Lien over the past year.
Consequently, the board concurred to acknowledge Lien’s resignation and reinstated Phua to the role he vacated in 2020. “As we understood where it was coming from, it was a little easier for us to accept it. However, it was not something we saw coming at all.”
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Lien assumes the senior advisor role for one year to facilitate the transition. His journey with 17LIVE began in September 2022 as group COO and he ascended to group CEO by March of the following year. Before his tenure at 17LIVE, Lien held key management roles in renowned Fortune 500 companies, including Starbucks and Electronic Arts.
17LIVE co-founder and CEO, Joseph Phua. Photo: 17LIVE
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Preceding Lien, venture capitalist Hirofumi Ono held the reins as 17LIVE’s CEO, succeeding Phua, who transitioned to company chairman. Ono spearheaded the company’s business strategy and growth in Japan, steering it resiliently through the pandemic.
Now that Phua has returned to his old job, he expects to stay on and not see himself as an interim. He expects to lead the team for years, highlighting that the company has ample room to grow. “One thing that is helpful to alleviate any concerns is that [Lien’s] replacement is not new. I am one of the pioneers of the live-streaming industry in the region. I built the company from the ground up in 2016 and am familiar with the operations inside out.”
Growth strategy
Despite the significant leadership shakeup, Phua says there will be no deviations from the company’s growth strategy. The focus remains on business expansion through M&A, driving product initiatives for the virtual liver (V-Liver) segment and actively pursuing commerce initiatives.
Aside from that, the company is aggressively expanding its market share in various markets by signing up more exclusive content creators. The platform has over 87,000 live streamers who have signed contracts spanning one to seven years.
17LIVE has plans to scale its presence in Southeast Asia, where the live-streaming industry is forecasted to grow significantly. According to Frost & Sullivan, the market size for live-streaming in Southeast Asia is expected to increase from US$1 billion ($1.3 billion) in 2023 to US$2.1 billion in 2027, representing a CAGR of 19.2%.
Beyond expanding its live streamer and user base in the region, 17LIVE is set to forge partnerships with media and entertainment giants across Southeast Asia, says co-founder and chief technology officer Ng Jing Shen. This strategy mirrors existing collaborations, exemplified by the alliance with Japanese video game powerhouse Sega.
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In November 2023, Sega released Like a Dragon Gaiden, a spin-off title of its widely successful video game series Yakuza. 17LIVE Shop was integrated into the Yakuza (Like a Dragon Gaiden) x 17LIVE Shinjuku Vision Appearance Contest. Aside from allowing viewers to make purchases and payments on the platform, top-ranked streamers in the event could win the right to appear in a Shinjuku Station Vision advertisement for the game series’ highly anticipated latest instalment, Like a Dragon: Infinite Wealth.
“We do these types of collaborations often in Taiwan and Japan. It presents advertisers with a unique marketing approach while also providing our creators with brand partnership deals that they may not be able to acquire independently. We are looking to establish these collaborations in Southeast Asia with the local giants,” says Ng.
The company also hopes to tap into the V-Liver growth in Southeast Asia. 17LIVE witnessed strong growth momentum in its V-Liver business, with an average of 2,000 V-Liver monthly active streamers and 75,000 active users in 2Q2023, representing a y-o-y increase of 6.5 times and 2.1 times, respectively. The company has also recorded a strong engagement, with an average of approximately 30,000 V-Liver spenders per month in 2Q2023, a 2.7 times increase y-o-y.
However, Ng understands that it may be hard for regular people to understand why live streamers with animated avatars are appealing. To explain, Ng says that V-Livers are part of the growing Japanese animation (Anime) culture. He says that more people are getting into anime-related content, which is clear from the increased media consumption.
In 2020, Netflix revealed that over 100 million households worldwide watch at least one anime title on the platform. Anime titles consistently made the top 10 list in nearly 100 countries that year. Fast forward to the first half of 2023, Netflix disclosed its most-watched anime titles, with the first season of Demon Slayer racking up a staggering 95.8 million hours in views.
17LIVE co-founder and chief technology officer Ng Jing Shen. Photo: Albert Chua/The Edge Singapore
Meanwhile, anime-related conventions have continued picking up across the region. Anime Festival Asia — held since 2008 in various Asian countries — drew 145,000 attendees to Suntec Convention Centre in 2022. In 2019, before the pandemic, it drew 120,000 participants.
Brands are also increasingly embracing collaborations with virtual streamers for ad campaigns. These partnerships feature fashion retailer Uniqlo and electronics giant Razer.
The 17LIVE team is actively developing new tools for V-Livers, aiming to seize a larger share of the rapidly expanding virtual streaming market in Japan and Taiwan. In a notable move, in April 2023, 17LIVE incorporated Live2D functions into its broadcasting features. This enables users to easily upload avatars from their smartphones and engage in virtual streaming without additional hardware or software — significantly reducing barriers to becoming a V-Liver.
The efforts to grow this business include developing its existing proprietary IP, Bushilive and marketing its new IP, GanGun Girls, which launched on Dec 25, 2023. “Once we are happy with the business path in those markets, we will bring our capabilities to Southeast Asia and build the base here,” says Ng.
Gaining investor confidence
While 17LIVE is optimistic about untapped opportunities, the company acknowledges the need for time for stakeholders unfamiliar with the creator economy to grasp its potential. Over half (62.53%) of the issued share capital of the spac shares were redeemed before the despac completion. Institutional investors, including Fullerton Fund Management and NTUC, fully redeemed their shares in the company.
Still, Ng emphasises the company’s unwavering commitment to delivering value to its stakeholders. He adds: “Live-streaming is quite new in this part of the world, so it will take some time for us to get the word out about our business. In terms of financials, we have been pretty solid. We have been ebitda positive since 2020 and we are a growth company with robust skills developed for this industry with a proven track record in Taiwan and Japan. I think it is a solid opportunity for investors.”
Phua concurs, adding that the company has remained profitable, aside from amassing sizeable cash flow, bringing it to a much stronger position than ever before.
As of June 30, 2023, 17LIVE’s cash and cash equivalents stood at US$39.9 million. Phua adds: “And, of course, there’s me returning to head the company. I believe no person in Asia knows the live-streaming business better than I do. Everybody else emulated the monetisation model my team and I built.”
“We are working hard to grow the business and I believe 2024 and 2025 will be the years we can prove the strategy we have laid out.”
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