Shoppable-Video Startup Firework Raises $150 Million in Funding Round Led by SoftBank
May 24, 2022
Firework, whose technology helps companies make live-stream shopping events and other video, said it has raised $150 million in a Series B round of funding that values the startup at $750 million.
SoftBank’s Vision Fund 2 led the round. Firework’s most recent funding effort raised $55 million in 2021 and valued the company at $230 million.
Firework’s technology enables shoppable streams and other video that run on company websites. It says it has 900 clients including grocery chains Albertsons Cos. and Fresh Market Inc. In April, it announced a partnership with advertising giant Omnicom Group Inc., which said it would offer its services to its marketing clients.
Firework, whose legal name is Loop Now Technologies Inc., began in 2017 as a consumer-facing social-media app and adopted its business-to-business model in 2018. The Redwood City, Calif.-based company said it plans to use the new funds to expand globally, explore acquisitions and pursue research and development.
Firework appealed to SoftBank because it aggregates video technology infrastructure, allowing companies to forgo the need to acquire their own streaming and hosting licenses, said Linda Yu, partner at SoftBank. And it helps companies sell directly to consumers by bringing interactive shoppable video to their own websites instead of relying on outside platforms, Ms. Yu said.
Even though live-streamed shopping has long been popular in China, it has been slow to take off in Western markets including the U.S.
That hasn’t stopped a range of companies from trying to get into the space. Internet company Meta Platforms Inc., e-commerce giant Amazon.com Inc. and technology company Alphabet Inc.’s YouTube have developed their own live-streamed shopping tools. Competitors such as Commerce Media Holdings LLC’s Ntwrk also offer live-streamed shopping platforms, often using small-business owners or celebrities to encourage users to watch and buy.
Most of Firework’s customers in North America use it to create short, prerecorded videos, while its clients in Asia emphasize live-streamed shopping, said Vincent Yang, Firework’s chief executive and co-founder.
Younger generations who are used to video shopping will lead the growth of live-streamed shopping in the U.S., said Frank Kochenash, CEO of e-commerce at Omnicom. Many of the ad giant’s clients in consumer-packaged goods and apparel are interested in enhancing the customer experience with shoppable video, Mr. Kochenash said.
Still, U.S. consumers view live-streamed shopping as a form of entertainment, making it potentially difficult for brands to draw people away from social media to watch such videos on their websites, said Blake Droesch, senior analyst of retail and e-commerce at market research firm Insider Intelligence.
The technology on social-media and video platforms has progressed, with many making it easier to complete a purchase without leaving the app, he said.
“It is going to be really tough to convince that audience to gravitate towards watching live video and live shopping on another niche platform,” Mr. Droesch said.
But if a retailer wants to directly collect consumer data and learn about a shopper’s behavior, the attempt may be worth it, he added.