While it’s undeniable that the COVID-19 pandemic was a boon to valuation in remote communication technologies like Zoom (NASDAQ: ZM) and DocuSign (NASDAQ: DOCU), the reality is that the virus added tailwinds to an already exploding industry. The remote economy further solidified live streaming in the culture of younger generations while familiarizing millions of people with the technology that may have not given it two thoughts a year ago.
Simply, COVID-19 was an accelerant for an industry already on fire thanks to improvements in internet technology (5G), increasing use of mobile devices, being part-in-parcel to younger generation’s lifestyles and more. These were some of the determining factors for Valuates Reports forecasting the global video streaming market rising from $38.56 billion in 2018 to $149.34 billion in 2026.
"We’re living in an ever increasing globalized world, shepherded in by live streaming technology," said KL Wong, Founder and Chairman of Hello Pal (CSE: HP)(OTCQB: HLLPF), in a phone conversation on the subject with Baystreet.ca. "Where once users would turn to static web page to fill their need, now they are looking for live streaming video, albeit for entertainment, make new acquaintances, learn or any other number or reasons."
Hello Pal is a proprietary suite of mobile applications built on a user-friendly messaging interface that focuses on social interaction, language learning, and travel where users can find and easily interact with people from all over the world through a variety of means, such as chat messaging, audio/video calling and live streaming.
Hello Pal: A Perfect Marriage of Markets
An app for iOS and Android, Hello Pal is, in a manner of speaking, a next-generation confluence of dating app Match (NASDAQ: MTCH), China’s entertainment app Momo, Inc. (NASDAQ: MOMO), social app Facebook (NASDAQ: FB) and Rosetta Stone, the popular tech learning company acquired in August by Cambium Learning Group for $792 million.
A key difference between Facebook and Hello Pal is that Facebook is designed for people that already know each other, whereas Hello Pal is meant for meeting and chatting with new people or groups from anywhere in the world. HP users are able to search by different criteria, including gender, location and language.
By offering different parameters, users can get specific to their needs. For instance, if a person is on or planning a trip to Japan, they can connect with people living there to learn about places to go and things to do.
The language component is a clear differentiator for Hello Pal. The company’s proprietary technology is not simply a translator (although it does translate text messages), it is a teacher. The app is pre-loaded with phrasebooks in 8 languages with more than 2,000 phrases. A user can select a commonly used phrase, listen to a recorded audio of it and subsequently speak and record the message on their own to participate in a chat.
As demonstrated by the popularity of Rosetta Stone, the best way to learn a language is to be immersed in conversation.
Live streaming Value
To build its live stream platform, Hello Pal partnered with the experts at Vortex Live last year. Vortex clearly saw an opportunity, as evidenced by putting up $1.5 million of their own money to build and manage the live stream feature in exchange for a block of Hello Pal stock.
Since launch last summer, the live streaming service of Hello Pal continues to gain in popularity and serve as the main revenue driver for the company. Nowadays, people livestream nearly everything: gaming, cooking, shopping, travel, events, product demos, etc. Hello Pal gives them a platform to earn money in doing so.
By being a "host" of live streams, users can receive gifts called "charms" from other users.
These gifts are purchased using the Hello Pal virtual currency platform, where users make top-up payments via popular payment platforms like Apple’s Appstore, Google’s Playstore, Alipay or Wechat Pay. When a host gets a charm, the charm can then be redeemed for cash.
The Hello Pal platform also includes a proprietary digital wallet allowing users to store and transfer popular digital assets and tokens, including Bitcoin and Ether, based on blockchain technology.
Profitability and a 6-Month Streak of $1+ Million in Revenue
Hello Pal now has more than 5.2 million registered users spanning over 200 countries and regions. 15,000+ of those people are daily active users (DAU) of the live streaming service, an increase of over 50% from previous reports from the company regarding DAU, a key growth metric for applications.
Business has really started gaining traction in 2020, with a string of six consecutive months with revenue in excess of $1 million. This includes October, during which monthly revenue exceeded $1.5 million for the second straight month. This is particularly impressive considering just seven months earlier, a record monthly revenue was set in March at approximately $448,000.
There were about 10,000 DAU of the live stream service in March, indicating that revenue per user is also increasing significantly.
Further, generating over $3.0 million during September and October points to accelerating growth considering revenue for the August quarter totaled $3.06 million. At the current clip, Hello Pal’s 12-month revenue run rate exceeds its market cap of roughly $15 million.
Gross profit during the quarter ended August 31, 2020 was $174,411.
"We will continue to refine our user experience, roll out new products and features, and operate in increasingly efficient manner as Hello Pal continues its growth plans," said Mr. Wong in a news release on Wednesday.
While operations today are exclusively in China, the HP Chairman says the growth plans include expansion into new, emerging markets where Hello Pal can have an early mover advantage, including the Middle East, India and Latin America.
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