17LIVE sprang from the dating app Paktor (Cantonese for “to go on a date”), founded by Joseph Phua in 2013 upon graduating from business school.
With quick success, Phua — and co-founder Ng Jing Shen (now 17LIVE’s chief technology officer) — transitioned to focus full-time on Paktor’s growth.
Phua gathered approximately $2 million in working capital to make it happen by “scraping and borrowing” from everyone he knew. However, being his first venture into business, the company ran out of money within six months.
The Singaporean recalls that his enduring relationship with Vertex Holdings began in July 2013 when the fund management firm under Temasek Holdings approached him, expressing interest in providing capital after recognising the company’s growth. Initially uninterested, Phua informed the prospective investor that Paktor had no intention to raise funds from external sources.
“We had $2 million in the bank; why would we need to fundraise? Why would I need to give up my equity to raise money? It’s obvious now that I didn’t know what I was doing. It didn’t help that the venture capital scene was at its nascent stages across the region,” he adds.
Acknowledging his earlier mistake, Phua approached Vertex in 2014. After detailing the strengths and weaknesses of Paktor and the team’s efforts to ensure business survival, Vertex Ventures agreed to become the company’s first institutional investor.
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In 2016, bolstered by additional capital from Vertex Asia Fund, YJ Capital, Golden Equator Capital and K2Global, Paktor acquired several other dating apps. During this period, Phua crossed paths with Jeffery Huang, the founder of 17Media, a small company operating a Taiwanese live-streaming platform since 2015.
Despite having a sound business model, 17Media encountered cash flow difficulties and other challenges. Recognising synergies between the two companies, Paktor acquired a controlling stake in 17Media. In 2017, the merger of the two entities resulted in the formation of M17, with Phua serving as CEO and co-founder.
The next step
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The company ventured into the Japanese market the same year, asserting it had achieved and sustained a leading position. Currently, 17LIVE is the largest live-streaming platform in Japan and Taiwan, in addition to its operations in Hong Kong, Singapore, the US, the Philippines, India and Malaysia.
“The media platform we built exceeded all expectations. I think it is an amazing business, the kind of business that the more you grow, the more profitable it becomes. When we were running the dating app business, we would be happy when we managed to get $300,000 in revenue per month. 17LIVE was able to generate that revenue in an hour. It is on a completely different level,” says Phua.
With this optimism driving them, M17 set a new goal: A US public listing. Fuelled by aggressive expansion, Phua and the M17 team believed the company was IPO-ready. Despite incurring substantial operating losses due to expansion, the company also demonstrated remarkable revenue growth, surging by 37.8% year-on-year to reach $38 million in 1QFY2018.
M17 aimed to be the first Taiwan-based company to list on the New York Stock Exchange (NYSE). However, it gained notoriety for a different reason — becoming the first company in NYSE history to report no trades after ringing the opening bell. The trading had to be cancelled due to share settlement issues and overall underwriting oversight.
The aftermath proved to be the toughest period for Phua and M17. Apart from addressing the fallout from Huang’s disappointment, conveyed through a public social media post, Phua had to undertake substantial company restructuring.
Trimming various roles linked to the IPO’s success drew attention from Taiwan’s labour department, intensifying media scrutiny. Despite taking over a few months, the dust eventually settled, allowing the M17 team to regroup and resume its growth trajectory.
Throughout the ordeal, Phua stresses the importance of moving forward and evolving, enabling him to “cover the scars.” He adds: “As long as I keep on taking the next step, I know I can eventually bring the company to where I wanted it to be.”
