Company Overview

17LIVE is a leading pure-play live streaming platform (by revenue) in Japan and Taiwan combined. Its business lines include Liver live-streaming, V-Liver livestreaming, and other businesses such as in app games and live commerce. 17LIVE is accessible globally, and its key markets of operations include Japan and Taiwan, with a presence in Hong Kong, Singapore, the United States, the Philippines, India, and Malaysia. It has fostered a diverse live streaming ecosystem with a loyal and engaged user community, as well as a deep pool of live streamers.

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1. What Is the 17LIVE Business About?

• 17LIVE is a leading live streaming platform that facilitates real-time interaction between content creators and users. Our platform allows users to broadcast live video content across a wide range of categories from gaming to music, entertainment, lifestyle and more. Viewers can engage with content creators through live chat, virtual gifts, and other interactive features, fostering a sense of community and connection.

• We are committed to empowering human connections while providing monetisation opportunities for creators through virtual gifting, subscriptions, sponsorships, and advertising revenue, enabling live streamers to turn their passion into a career.

• Our 17LIVE vision is to create a dynamic and engaging space for content creators to share their talents and connect with audiences worldwide. We believe in the power of unscripted, unpredictable content, and our business is about building a safe and close environment where users can be their most authentic selves. We are dedicated to supporting our users to help turn their dreams into reality, both online and offline.

2. What Are the Revenue Streams for This Industry and 17LIVE Specifically?

• In the live streaming industry, revenue streams include subscription services, advertising and merchandise sales. These revenue streams may differ depending on the platform and type of content being streamed. For 17LIVE, revenue is primarily from our live streaming businesses by selling virtual points to users, who in turn use these virtual points to purchase virtual gifts to show their support and appreciation for their favourite live streamers and V-Livers, which results in successful monetisation for the live streamers.

• There is also a multi-channel monetisation model which includes virtual gifting and subscription to both live streamers and V-Livers, as well as sales of game equipment and tools within the in-app games. 17LIVE possesses multiple monetisation streams that allow us to be operationally profitable and generate cash flow to support new initiatives.

3. How do you see 17LIVE’s revenue streams evolve over the next few years?

• 17LIVE has grown beyond being a live streaming platform. We have built a solid foundation of live streaming operations which forms the base for new growth initiatives. Our user database and analytical capabilities through AI allow us to generate insights and introduce new initiatives for our audience. 17LIVE has achieved positive EBITDA since 2020 and boasts a scalable business model that enables sustainable growth and profitability.

• In the coming years, our sources of growth will continue to be live streaming and our content creators, while expanding our live commerce business. Our Group’s live commerce offering OrderPally, saw strong performance in 2023, doubling in annualised gross merchandise value (GMV), and turned in a solid segmental profit for the Group. With its successful growth, we have made plans to further roll out the platform across Southeast Asia to diversify our revenue streams.

• Southeast Asia is one of our pivotal new markets due to the region's growth potential in live streaming. We will export Japanese and Taiwanese content and merchandise into the region through a combination of live streaming, live commerce channels and 17Shop. We expect to see a slight shift in geographical revenue distribution with higher contributions from Southeast Asia.

4. How Do You Attract Live Streamers to Contract With 17LIVE?

• Three key pillars drive success on the platform – a strong user base, deep engagement, and a cohesive ecosystem. Gifting drives healthy competition among users, while our in-stream interactive games and user interface enhance engagement. This creates a vibrant community connecting users and fostering a dynamic platform. On 17LIVE, live streamers can gain access to a large and engaged audience, as our users watch live streaming for 90 minutes daily on average. This can lead to higher earnings through virtual gifts.

• Additionally, talent management is how we stand out. Our talent management team scouts streamers and offers support to help them grow. Our team provides comprehensive onboarding support including hands-on training, guides new streamers through the process, expands fan bases across social media, and rewards winners. This supports content creators in various aspects of their brand and audience, ensuring they can still thrive without the burden of having to manage this alone.

• We have also recently signed a Memorandum of Understanding with mm2 Asia Limited, to strengthen and amplify our entertainment offerings and production capabilities across Southeast Asia. This enables our live streamers to gain exposure, reach a broader audience, and amplify their presence.

5. How Does 17LIVE Engage Users on the Platform?

• We focus on content creation and human connections, leveraging both online and offline events to bring together streamers to compete in live streaming contests, fostering excitement and a sense of community. 17LIVE hosted the inaugural Singapore offline event at Ritz Carlton Hotel in December 2023 which saw streamers compete for S$100,000 in prizes. The event was attended by 50 streamers from Japan, Taiwan, Hong Kong and South Asia, and attendees were shortlisted from a qualifying round which saw over 4,000 entries.

• This sets us apart, as we integrate online interactions with real-world experiences, amplifying user experience. We also host a variety of other offline events, including fashion shows and live concerts. In Japan, we regularly host V-Liver concerts. We had streamers participate in the Tokyo Game Show 2023, which is one of the world’s largest gaming events. One of our streamers participated in the Street Fighter 6 battle segment (a licensing partnership with Capcom) and drew immense support from his fans and the audience. V-Liver girls' group “BUSHILIVE,” that debuted in July 2023 also performed at the event while GanGun Girls debuted in early 2024.

6. What Is a V-Liver and Can You Tell Us More About This Industry?

• A V-Liver is a digital avatar utilised by content creators which are animated, customisable and are often visual representations of a live streamer’s persona or brand. They are used in live streaming, gaming, virtual reality experiences and more. 17LIVE is a pioneer of V-Liver live streaming and is the only platform that has both virtual streamer and live streamer, enabling real-time interaction between users and characters, creating an innovative experience. We believe that this is a game changer in the live streaming industry as it offers an innovative and engaging environment, and we will craft a long-term strategic vision to enhance this new platform.

• Currently, the virtual talent market is experiencing significant growth, with talents diversifying into various entertainment activities beyond live streaming. In Japan, V-Livers are a significant revenue source for their interactive video industry. They actively engage in real-life events, merchandise development, and collaborations with corporations, a trend that is also gaining popularity in other countries. As technology advances and digital entertainment becomes more prevalent, the opportunities for virtual talents to expand their reach and influence both online and offline are enhanced.

• Due to their digital nature, V-Livers can attract a global fan base, transcending language and cultural barriers. This expands the reach of interactive video streaming platforms and increases their market presence. Moreover, V-Livers provide diverse monetisation channels through virtual gifting, merchandise sales, and paid subscriptions, generating sustainable revenue streams for both the personalities and the platforms.

7. Tell Us More About 17LIVE’s Financials in Recent Years.

• In recent years, 17LIVE has demonstrated improvements in profit margins and strong cash flows. In FY23, we achieved an operating revenue of US$278.9 million, accompanied by a gross profit of US$114.9 million. Notably, our operating income in FY23 saw a significant increase of 35.8% year-on-year (YoY), reaching US$13.8 million, driven by our strategic shift to focus on profitability by targeting quality users over quantity. This resulted in an enhanced operating profit margin, rising from 2.8% in FY22 to 4.9% in FY23, showcasing our ability to generate higher profits from our core business operations.

• Our gross profit margin has also improved significantly from 34.7% in FY22 to 41.2% in FY23, primarily driven by increased revenue from high-margin in-app game sales, optimised payment methods reducing channel costs, and enhanced operational efficiency lowering server and bandwidth costs. Although 17LIVE reported a net loss of US$247.9 million in FY23, this was primarily attributed to non-operating expenses totalling US$258.7 million, driven by non-cash revaluation losses on financial liabilities and one-off de-SPAC related expenses.

• Excluding the net effects of these one-off and non-cash expenses, our adjusted operating income has increased by 40.1% YoY to US$15.4 million. Adjusted EBITDA also showed significant growth, increasing by 26.0% YoY to US$20.0 million, while adjusted net profit rose by 93.3% YoY to US$11.0 million. Overall, 17LIVE has managed to maintain a healthy financial standing which positions us well for acquisitive growth opportunities and indicates our company’s financial stability and liquidity.

8. What Attracts Individuals to Become Live Streamers?

• There are several factors which include an expression of passion and creativity, community engagement, building a fan base as well as monetisation opportunities. As live streaming platforms such as 17LIVE, Twitch, YouTube Live and others continue to expand, becoming a live streamer has become increasingly accessible and anyone with access to the internet and an electronic device can easily start live streaming.

• Moreover, successful live streamers can earn a significant income through these channels and provide an array of avenues for monetisation, allowing content creators to turn their passion into a potentially lucrative career. Successful streamers can leverage various monetisation channels and achieve substantial financial success, making livestreaming a career option for many aspiring content creators.

9. What targets has 17LIVE set for improving its Environmental, Social, and Governance (ESG) performance in the coming years?

• 17LIVE is committed to implementing strategies that promote diversity, equity, and inclusion (DEI) within the organisation. This includes fostering a workplace culture that values and respects individuals from diverse backgrounds, providing opportunities for professional growth and development, and ensuring fair treatment and representation across all levels of the company. In line with this commitment, we have recently expanded our board to include diverse perspectives and expertise, enriching our decision-making processes and reinforcing our dedication to inclusivity.

• On top of this, we also aim to prioritise employee well-being and satisfaction by promoting work-life balance and creating a supportive work environment. Through small but impactful changes, 17LIVE seeks to improve our ESG performance in the coming years, not only drive positive social and environmental impact but also uphold high standards of corporate governance and responsibility.

10. Why Should Investors Take a Closer Look at 17LIVE?

• The live streaming industry is currently experiencing unprecedented growth, propelled by technological advancements, and evolving consumer preferences towards interactive content. As one of the leaders in this industry, 17LIVE continues to expand our user base and revenue streams. We currently operate globally including Japan, Taiwan, the United States and Singapore, and continue to expand our footprint in new geographic markets. Our platform's ability to attract and retain users from diverse demographics and geographic regions enhances our scalability potential, positioning our business for sustained long-term growth.

• 17LIVE has also demonstrated strong financial performance, marked by improvements in key metrics such as gross profit margin, adjusted EBITDA, and adjusted net profit. Supported by an experienced management team with a proven track record in the technology and entertainment sectors, 17LIVE is well-equipped to navigate the challenges and capitalise on the opportunities presented by the rapidly evolving live streaming industry. ▪ Being in a high-growth industry, with diverse monetisation avenues, a global reach, innovation, strong financial performance, and an experienced leadership, management believes that 17LIVE is poised for growth organically and inorganically.