Video streaming is now one of the dominant ways of accessing the information on the internet, leading to the emergence of different companies in the field. As a result, new video streaming companies are now attracting record funding from big firms due to the massive potential. The video streaming companies sector consists of Crunchbase-registered companies and startups in the video streaming space under the categories of Content and Publishing, Media and Entertainment, and Video.
Data presented by Buy Shares indicates that video streaming companies have raised about $15.93 billion on a year-to-date basis. There was a sharp spike in the money raised between February and April. The amount raised in April stood at $6.08 billion, a growth of about 131.77% from March’s $2.62 billion.
The research also overviewed the most active investors in video streaming companies between Q1 1997 to Q3 2020. The data indicates that Google ranks high with a total of 107 investments. The figure is at least double compared to second-placed Castor Venture’s 47 investments. In total, there were 330 investments with Google taking the largest share at 32.42%. Social media giant Facebook’s $5.9 billion investment in Reliance Jio this year is the highest investment in video streaming companies YTD.
From the data, the highest amount was raised amid the coronavirus pandemic global peak in March and April. During this period, most people turned to the streaming platforms to pass time while in lockdown. The scenario presented a big opportunity for investors to profit. However, as streaming companies gained more users during this period, investors must strive to ensure the record numbers are maintained after the pandemic.
Explaining Google investments dominance in 2020
Before the pandemic, the improvement of hardware and bandwidth options saw big companies join the streaming business. Google’s interest can be traced to almost a decade ago with YouTube acquisition.
It is no surprise that Google has the highest number of investments considering that the company has various ways of investing in startups. Alphabet, Google parent has at least three venture capitalists arms in addition to a lot of other start-ups investment activities. Automatically, Google has become an influential player in big tech’s start-up scene.
From a strategic point, the network of start-up investment arms enables Alphabet to put money in the early stages of companies. Google usually focuses on new unique products by getting a first look at emerging technologies, and ingratiate Google with the next generation of business leaders. Some of the notable Venture Capital arms for Google include GV, Capital G, and Gradient Ventures. It is worth mentioning that individual Alphabet divisions outside Google sometimes invest in start-ups that are related to their missions. Google is also known to make huge equity investments for example the case of ADT Security.
Notably, the diversity of Alphabet’s venture investments mirrors with the diverse collection of businesses, and initiatives under the company’s corporate umbrella. However, it is usually difficult to predict Google’s next investment project as it has no publicly known blueprint. Notably, the company’s portfolio mainly consists of companies in the space of mobile, software, consumer internet, life sciences, gaming, big data, financial technology, big data, and media.
Trends in video streaming attracting new investors
Investors are pumping money in streaming platforms to leverage emerging trends in the sector. For example, the rapid adoption of mobile phones owing to the growing popularity of social media and other digital mediums will fuel the growth. Additionally, the growing adoption of cloud-based solutions to increase the reach of video content is influencing investors into space especially in North America. With big technology companies pumping money in streaming companies, they intend to introduce technical advancement. This is a major threat to standalone companies like Netflix.
It is clear that the big tech companies’ investments are moving away from North America. For example, Facebook investment in India’s Reliance Jio could help the social media giant expand its reach in India. Such deals mean that both parties get to benefit. As Facebook leverages Reliance Jio’s reach the Indian company will then bank on the social network’s technical expertise.
Most of the start-ups attracting big companies have established themselves in the market with unique ideas. At this point, it is not clear what big companies look for before investing in startups.