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“The revenue multiplied 54 times in a year!”. How Destream, a Fintech product for streamers, develops

Wednesday, December 23, 2020

Content maker is now one of the most desired professions for youth all around the world. The market in this direction grows at least for 10% annually. destream startup has created a very useful tool for streamers and bloggers — a platform for receiving donations from viewers. It’s already working and earning money. As for now, the team is looking for investments to scale.

Startup Jedi

We talk to startups and investors, you get the value.

Tachat Igityan, startup’s co-founder and CFO, told us why this niche of streaming tools is interesting now and how destream is going to become the leader of the niche.

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What destream does

destream platform adds additional functions to the stream. First of all, a quick and easy way to send a donate and tool for interaction with the audience: customized widgets, customized event notifications, overlay manager and many others.

Click on the image to open destream's profile on the Rocket DAO platform

All tools are provided to streamers for free, and they use them very actively. With our help the stream audience involvement increases, as well as, the number of donations.

destream can be integrated into the main software solutions for streaming: OBS and XSplit. It is enough to create the desired view of the stream in our online builder, add a link into the streaming soft and enter the preferred streaming platform.

We work with advertising content, which meets the requirements of Youtube or Twitch. We consciously don’t enter the niche of adult-content — this market is still in the grey zone as for us, the risk is higher than the potential income.

We have a transactional monetization model: 4.77% from the sum of received donations are transferred to us. It is profitable for the streamer, as he pays only if he earns. In perspective, we are planning to add paid additional services for streamers.

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How Destream, a Fintech product for streamers, develops

There will be even more donations

Several years ago, my friend and partner Anar Mekhtiev pointed me to the donation and streaming market. Before that, I was more immersed in FinTech products and didn’t look in this direction. But a quick study showed some cosmic amounts of money and an almost complete absence of strong players. On this note, we started developing the project in 2018.

Over the past two years, the concept and vision of the product haven’t changed dramatically as we came up with initially, and we are moving. This suggests that we are clearly in the market. We just expanded the audience to all content makers who, in one way or another, accept donations from fans.

But the market has grown noticeably: only $ 793 million donations were sent to streamers on Twitch in 2017. According to TwitchTracker, in 2019 this figure has already exceeded $1.7 billion.The pandemic had a favorable effect on this market in 2020: in 10 months it grew by 40%. By the end of the year, the total amount of donations to streamers is estimated at more than $3 billion.

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How Destream, a Fintech product for streamers, develops

FinTech by 80%

Our main focus is easy payments. We make it convenient and easy for donators to donate. After all, the money is in his pocket and the easier it is to send it, the higher the efficiency.

destream is an 80% FinTech project. Our team builds its own payment infrastructure and it is the most developed on the market: we do not outsource transactions to PayPal or other payment aggregators. We have all convenient payment methods and the ability to link a card for quick payment.

Putting together a similar infrastructure takes a lot of time and money. Payment systems don’t like to work with low turnovers, it is easier for them to be banned than to understand the business of a small startup. First, a startup needs to prove its worth as a partner of such a payment system, and this requires stable high turnovers — a vicious circle turns out.

We were able to launch the project only with the help of an investing partner. At the start, we used their payment infrastructure and are now building our own.

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How Destream, a Fintech product for streamers, develops

Competitors have different focus

Largely due to the complexity of working with accepting payments, our competitors are focused on working with streamers. They make additional services for them and sell them by subscription.

By direct competitors, I mean three companies: StreamLabs, Stream Elements, Donation Alerts. All of them raised investments in Round A in the amount of $10 million or more, two of them were bought out by strategic investors. Donation Alerts is now part of the Mail.ru Group, and StreamLabs lives under the wing of Logitech, which acquired them for $117 million.

We follow the market and see that our competitors are now moving in two directions: either towards an advertising agency, namely, they sell ads from “their” streamers, or they create new streamers and monetize them in every possible way.

Our competitors aren’t involved in the payment infrastructure development. They use ready-made solutions that give a much lower conversion to donate. To get serious about accepting payments, they need to refocus, and this is very time consuming and expensive.

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How Destream, a Fintech product for streamers, develops

First results

Our project doesn’t lag behind the market development pace. From February to October, the revenue has increased by 54 times and the number of transactions has risen by 23 times.

We are steadily increasing the conversion into donates, clear the way to easier send the money: the market only accepted PCI/DSS (PCI DSS (Payment Card Industry Data Security Standard) — data security standard in the payment card industry, which is a documentation with a list of criterias, to which a service should stick, if it has control over the card number, its due date and CVV-code. — Startup Jedi), so they made “linking a card” possible and “put” the whole payment form into a display of one phone. Streamers tell us that our approach increases the frequency of donation, and we can see that in our analytics.

THe speed and the convenience are extremely important: the donator has a broadcast in front of his eyes, he wants to send money as quickly as possible and see the reaction to their arrival. Impulsive desire quickly cools down with any difficulties with payment, so we remove them as much as possible.

We changed the payment form five times, and found many interesting insights in the process. If the “e-mail” field is at the first step, then users immediately have questions “Why do you need my mail?”. When we moved the input field to the second step, these doubts abruptly disappeared.

At the start of the project, about 70% of users who clicked the “make donate” button made a payment. Now we have reached 87% — all thanks to the new payment form and variety of payment methods. For example, we have the ability to pay from a mobile phone account, in cryptocurrency and through PayPal.

An interesting fact: payments in cryptocurrency give a small number of transactions, but very large checks, on average about 5 thousand dollars — this is clearly a conscious desire. At the same time, as a tool for quick, emotional donations with a small check, this payment method is poorly suited, since settlements in cryptocurrency are slow and expensive.

Our average paycheck depends on the region: in Russia it is 170–300 Rubles ($2.3-$4), in Europe it is 12 euros ($14.5). Thanks to the launch in Europe, our average paycheck on the platform has grown to 11 euros.

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How Destream, a Fintech product for streamers, develops

Target markets

In our niche we have to divide markets by the languages, not by the countries. The largest market in the world is English-speaking market, the second goes German market by the number of streamers and viewers, and the Russian market is the third one.

We don’t count China, as it is a whole separate world. They have their own streaming platforms, where they integrateв all possible services and functions. The market is a close circuit and you can only enter it with a solution that is unique for China and with strong local expertise.

We consciously started from the Russian-speaking segment and we keep moving to the more wealthy markets. RU-segment is less famous from the point of view of making money: in order to make serious sums, we have to operate at least half of all donations, and it is unreal. We were guided by other reasons: RU-segment is a great place to finish developing the product.

Users have got used to good FinTech products and at the same time are not burdened with decency: all the faults are told immediately and in great detail. We have brought the destream platform to a state where feedback from Russian-speaking users has become almost completely positive — and now it is much easier to scale in Europe, since from the point of view of the process, a Russian streamer is no different from any other: it works on the same platforms and create s similar content.

The Baltic States and Greece were next countries after Russia. This choice of countries is also dictated by the languages ​​available to us. One of our advantages is fast manual technical support, and for its work, people with knowledge of the language are needed. So far we have Russian and English speaking employees who work with clients from the CIS and the Baltic states, as well as Cypriots for whom Greek is the native language. At the same time, on our platform, we have donators from all over the world.

We will launch on the German-speaking and English-speaking markets with investments. We need a large amount at once to quickly strengthen the team, build marketing and enter the market with flying colours.

We also have a strategic partner in Latin America who is ready to launch with us, but entering such a region requires high costs and local payment infrastructure. Without it, it won’t be possible to provide quality service. We will be planning to start in Latin America after attracting the round.

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How Destream, a Fintech product for streamers, develops

Development plans

Now we are focusing on connecting new payment methods — this is necessary for development in new countries. There are local players everywhere, and on average, a third of operations pass through them. Launching without them is pointless. For example, in Russia you cannot survive without QIWI and Yandex.Money, in Holland you definitely need iDeal, etc.

We have a groundwork for integration with IoT devices: for example, for a certain amount, you can turn on a confetti machine over the head of a streamer and shower them with a rain of sparkles in the air. Connecting devices will simply provide an endless field for interactive streaming. We showed this idea at a specialized exhibition and received excellent feedback.

We also want to release our branded card, the balance of which will be equal to the balance on the platform. The streamer won’t have to think about withdrawing money at all.

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How Destream, a Fintech product for streamers, develops

Everybody follows the leader

The best attraction channel is our “department of love” to streamers. Its main task is to maintain direct contact with content makers and connect them to our platform. The more awesome is the streamer, the better.

When a large streamer connects and becomes your ambassador, then there are no problems with further promotion. In Greece, we reached an agreement with ANTILIPSI, the top local content maker, and everyone else followed him.

Streamers are afraid that they will put another button and people will stop donating them. They are afraid that the donation platform will steal their money, take loans on their documents and dissolve into the night. To be convinced of the reliability of a new solution, streamers need a positive example from their colleagues.

In this industry, everyone runs after leaders and adopts their experience. But negotiating with top content makers is still a challenge. Young people with such a level of popularity and income feel especially good. You need to adapt to their requirements and communication style. Along with a co-founder, we are constantly involved in the attraction process so that the conversation with potential partners is on an equal footing.

Technical support significantly affects the network effect. Within a few minutes, a live person responds to any appeal and, usually, quickly finds a solution. Efficiency is very important for streamers, and thanks to this advantage we are recommended to colleagues in the shop. We also have specialists who help to set everything up and make it beautiful at the start.

Target advertisements in social networks and content marketing are having good results. In addition, we organize cyber tournaments with money prizes: the streams where they are participants, gather the audience of a few thousand viewers and that’s how we get new streamers-partners.

Besides, we neatly keep a blog where we tell about useful insights from the industry, share success stories from our partners — and this is also an effective and cheap promotion channel.

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How Destream, a Fintech product for streamers, develops

Experienced team

Our Core Team has all major skills: we are all professionals in Digital-industries: from marketing to development.

I have been dealing with development of FinTech products for more than 5 years, so the topics of transactions, payment methods and banks. Anar, my partner, was managing a company that was developing heavy-loaded systems; he entered the project with his own team of developers. Alexey Khvostenko, a Solution Architect has also joined our project; under his belt he has been gathering telemetry for Baikonur and Plesetsk.

Larry Stalmbus, our manager, has been working with me in the area of banking software. Dmitry Zorkin is responsible for marketing, as he perfectly understands the market; he runs one of the world’s top gaming chair manufacturers. We cooperate with him and manufacture brand chairs for streamers.

In our “department of love” is working a streamer girl, who liked the product that much that she started to sell it by herself. Her example motivates me to work even harder, as this kind of trust has to be justified.

If suddenly someone from the team has free time, he helps the “department of love” to communicate with potential clients. We all sit down on a regular basis and write cold letters to content makers with an offer to connect to destream. Thanks to such communication, everyone clearly understands the needs of customers, and sales are growing.

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How Destream, a Fintech product for streamers, develops

Investments

We raised seed investments by all available methods, including the ICO. This idea worked badly, as the investment market went into hibernation after negative examples of investing in crypto projects. Then we invested all our funds in the project, took out loans and continued to develop.

Now we are looking for an investment of one million euros in order to quickly enter new markets, expand the team and become profitable. We are also planning to obtain a couple of financial licenses, this will simplify the process of connecting to different payment methods and, in general, make our life easier.

An ideal investor for us is an entrepreneur with views on the streaming and UGC services market (UGC — user generated content or user-generated content — Startup Jedi), or an investor from the financial sector with his own payment infrastructure that we can use.

23 Dec 2020

 

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