Chinese dating & social app Momo has seen revenues soar as its live video streaming business tripled from the first quarter of 2016.
The Chinese company recently announced it had hit revenues of $99m for Q2 of 2016, a 222% increase from the year before.
This was driven by a tripling of its live streaming revenue compared to Q1 figures, which increased to $57.9m, something the company described as a “home run”.
Momo said this massive growth was thanks to an increase in the number of paying users of the live video service, which hit 1.3m at the end of Q2 2016.
The streaming service, which launched in the third quarter of 2015, lets users broadcast live videos of themselves, as well as watching videos of others, commenting and sending virtual gifts to other streamers.
These videos could be anything from makeup tutorials and fashion advice to watching people eat lunch, test drive a car, or play music.
Users of Momo can buy and send virtual gifts to these live streamers, and the company takes a 50% cut of the profits.
The most popular broadcasters on the app can make tens of thousands of dollars a month by accepting these gifts.
It’s a space that is currently booming in China, with everyone from digital giants like Alibaba, Momo & YY, as well as the newest startups, trying to get in on the action.
By Q1 of 2016, Momo had made $15.6m from these virtual gifts, already making it Momo’s best performing monetisation strategy compared to its other channels – VIP premium subscriptions, mobile marketing and gaming.
And by the second quarter, this figure soared to $57.9m, less than a year after the feature was first launched.
Speaking about the increase, Momo said: “At a strategic level, live video is much more than just a monetization opportunity for us. It is essentially an important extension of our social ecosystem.
“As a brand new form of interaction enabled by technological transitions, live video service is reshaping the way young people socialize and have fun via internet.”
And with its latest financial results, Momo also revealed that the going private buyout proposal put forward last June has been withdrawn.
The $1.9bn buyout offer was proposed by the CEO & co-founder of Momo, Yan Tang and a group of management affiliates that included Alibaba and Sequoia Capital, who wanted to buy the remaining shares of the messaging app.
Speaking about the decision to rescind this offer, CEO Tang said: “During the privatization process, we have consistently maintained our focus on business operations and delivering growth to our investors.
“Driven by solid fundamental improvements, our non-GAAP diluted net income per ADS increased from US$0.03 in the second quarter of 2015 to US$0.12 in the second quarter of 2016. Our GAAP diluted net income per ADS increased from US$0.01 in the second quarter of 2015 to US$0.08 in the second quarter of 2016.
“With the privatization proposal from the Buyer Group behind us, we are more committed than ever to driving business growth in the interest of the Company and our shareholders.”
With its very impressive financial report, the company also announced it had released a new short video service called Moments, which lets users create and interact with short video stories, like Snapchat and Instagram’s similar story-based features.
The Beijing-based business also said it expects its revenue growth to continue, predicting net revenue between $125m and $130m by Q3.
Check out the full financial results here.