Back in the early 2010s, Thierry Schellenbach was attending an open coffee event when he overheard three guys talking about starting something with payments. That tiny team turned into Adyen, one of the Netherlands’ largest success stories. Almost a decade later, Thierry still fondly reminisces this memory – “It’s inspiring to see other founders start small and grow into huge companies.”
A memory that in some way or the other shaped his own entrepreneurial journey, which began right after he graduated from Erasmus University, Rotterdam. He started a company together with three other guys. It went through a couple of pivots; one of them was a social network that grew to millions of members and the company was called Fashiolista – a Pinterest-like social network dedicated to fashion. Fashiolista was acquired by Venture Builders and a private equity firm bought the marketing firm that spun off from Fashiolista.
Thierry has come a long way since Fashiolista; literally. He moved from Amsterdam, the Netherlands to Boulder, Colorado, and has started a new venture called Stream.
Stream develops enterprise-grade activity feed and chat APIs, enabling product teams to build chat and activity feeds for their applications at scale, economically and efficiently. It also offers UI kit; scalable APIs; frontend components for React, React Native, Flutter, iOS or Android; integrated machine learning; and a management dashboard. Stream powers activity feeds and chat for over a billion end users across their two products.
Fashion to feeds
While working on Fashiolista, one of the problems that he struggled with was scaling the activity feed, as the social network grew to millions of users. This was an issue that even tech behemoths like Twitter and Facebook faced. So, when he was thinking about what to start next, it made a lot of sense to him to focus on feeds.
“This is really just about solving a personal pain point. We were trying to build a social network, and instead of focusing on the community and growing the user base, we were solving all these technical issues, such as how to keep the activity feed up and running when you add a lot of members. We also saw some other companies like SendGrid do well in this space,” says Schellenbach.
Get to know Stream
Stream was initially founded by Schellenbach and Tommaso Barbugli in Amsterdam, the Netherlands. The company participated in the Techstars NYC program. After the program, Stream moved its headquarters to Boulder, Colorado.
Some of the notable companies that Stream works with include Stanford, NBC Sports, PowerSchool,
Stocktwits, Freeletics, Match, TaskRabbit and Dubsmash. Stream’s components for chat and activity feeds enable these apps to fuel growth, drive engagement, and increase retention.
Talking about the business model of Stream, Schellenbach says, “We sell the product over APIs. It’s very similar to what Twilio does. I think Twilio is probably one of the most similar companies. In the case of Stream, you make an API call to initiate a chat conversation or you make an API call to build the feed.”
US versus Europe
One of the key reasons why Schellenbach decided to move to the US was because fundraising in the US is easier than in Europe.
“When we got started with Stream, I wanted to do fundraising in the US because fundraising in Europe was always very difficult. I think the fundraising ecosystem in Europe has been improving over the last couple of years, which is good and I think is very important for Dutch startups, but it was always a bit of a struggle. So that’s why we went to participate in Techstars New York, because you need something to get that network going. And Techstars was very effective for that. I remember fundraising in Europe took us months to close rounds, which was really slow.”
He thinks it’s very hard for individual venture capitalists to change this. “VCs tend to focus on a particular stage. So it’s hard for any individual firm to change the whole ecosystem.”
“But I think it’s very important that they do. Because at the end of the day, it makes it really hard to build a startup in Europe that competes with American companies, because you have this disadvantage in terms of fundraising,” he opines.
“I always thought for my next startup, I’m either going to do something local to Europe, like Adyen or Spotify, where they don’t really directly compete with American companies or they have something to get started, or we end up raising in the U.S. That’s why we joined Techstars in New York in 2015.
Recalling an interesting incident, Schellenbach shared, “We did the demo day, and I still remember two days after the demo day I got an email from Dharmesh Shah (co-founder and CTO of HubSpot).”
Shah emailed Schellenbach stating his own struggles with feeds and that he was looking to invest in Stream. Schellenbach also mentions that he never even ended up having a phone call with him, as Shah was really busy and didn’t really care about the terms. He just wanted to invest $100K (nearly €85.6K) in Stream.
Schellenbach mentions that something like this never happened to him while he was operating in Europe.
Socially-distant fundraising
In August 2020, Stream announced the close of its $15M (nearly €12.8M) Series A funding round, led by GGV Capital. This new round brought the company’s total funding to $20.25M (nearly €17.3M).
With this funding, Stream plans to invest heavily in scaling its global team across engineering, sales, and marketing.
“With the growth in healthcare and education, our chat product’s numbers started going up at a ridiculous pace. We were growing like 30% to 40% month-over-month. So, it felt like a good time for us to raise funding, even though you have to do that over Zoom at the moment. But it worked out well. We spoke to some VC firms and we chose to work with GGV and Dick Costolo’s 01A advisors,” says Schellenbach.
According to the company, in the past six months, revenue from Stream’s chat API has quadrupled and grown by 300%. Schellenbach mentions that based on Stream’s current growth, it would probably take the company at least four years to hit the $100M (€85.7M) mark, in terms of revenue.
Stream has also raised funding from big names such as Dick Costolo, former CEO of Twitter; Tom Preston-Werner, and Olivier Pomel. Schellenbach mentions how having angel investors and being a part of Techstars opened many networking doors for Stream.
“We were running breakeven for the last year or so with Stream, before we raised this round. We already had some revenue, and we were running breakeven, but now that we have raised this round, our expenses are of course ramping up really rapidly. We are aiming to spend the money in about 24 months. That’s the target,” says Schellenbach.
One interesting point to note about Stream’s recent fundraising was that it was raised via video conference platform Zoom. It did cause some trouble for them, as some investors only wanted to follow up, in case they went to San Francisco and meet up in person; even though the Covid-19 cases were shooting up. “It was only like three or four of them, but it does happen, some VCs are still stuck in their old ways,” notes Schellenbach.
Strong roots
Stream has its headquarters in Boulder, Colorado, it has an office in Amsterdam as well. Schellenbach operates from the U.S, whereas Stream’s cofounder Tommaso Barbugli is in Amsterdam, along with nearly half of Stream’s team.
According to Schellenbach, the reason why Barbugli stayed back in Amsterdam was that he didn’t have a clear way to get a visa for Tommaso. So, they just went with it.
“I had to be here (the U.S.) for fundraising; there was no way around that. But, yeah, it worked out well, Tommaso started building up the team in Amsterdam. We actually found that the level of talent in Amsterdam is very high. It’s a desirable place to live, so a lot of people from Europe are willing to move to Amsterdam. We have people from Portugal, Italy, Russia, and Poland, among other places, moving to Amsterdam. We also do remote nowadays, but many people moved to the office as well, so it’s been good.”
The bold move of moving to Boulder
Schellenbach shares an interesting story as to why he chose Boulder as Stream’s headquarters. “I was in Techstars New York, and I was having a bit of a hard time trying to arrange a visa, but my wife was working for an American company with an office close to Boulder, Colorado, and so she could do an intercompany transfer. And that solved my visa issue.”
Talking about the entrepreneurial significance of Boulder, he mentions, “Boulder is actually where Techstars – one of the best accelerator programmes in the world – was founded. And they are from Boulder, Colorado. Foundry Group is also from Colorado. So, Boulder has more venture capital activity than the Netherlands, which is surprising. So I ended up moving here, and it’s been great. We raised our first round, our second seed round, without too much trouble, and it’s been pretty good.” The ecosystem is very open and supportive to new entrepreneurs. It really follows the Techstars give first mentality.
Chat beats Corona
According to Schellenbach the initial impact of the Covid-19 pandemic on Stream was quite severe. “A lot of our smaller customers started going out of business. I also started getting worried about some of our bigger customers. And one of our bigger customers started reducing usage, and another one went out of business. So, things didn’t look good.”
However, the Stream Chat messaging platform API & SDKs proved to be a saviour for the company.
“The new chat product – not so much feeds but mostly Chat – began growing like crazy to facilitate online events. Most of the larger online events apps are using Stream these days,” he mentions.
Education is another key area where Stream’s Chat products have been largely incorporated, during the pandemic. The company works with Cambridge, Stanford, PowerSchool (one of the largest K-12 ed-tech platforms), Kiddom, and some other ed-tech apps.
Growing online communities, as well as healthtech companies, have also contributed to the acceleration of Stream’s growth and helped it raise this round.
Stream team
According to Schellenbach, “When we raised the round we were about 45-50 people. But, now we’re up to 80. So it’s going up really quickly, which is kind of hard to deal with. But we’re trying. By the end of the year, we hope to be at around 100,”
Stream is also currently hiring and is looking for VP of marketing and VP of engineering. It is also seeking Go backend engineers internationally for its Amsterdam office.
Another interesting fact that Schellenbach mentions is that most of Stream’s engineering team is based in Amsterdam.
The endgame
Talking about his exit plans, as to whether he plans to sell this company or opt for an IPO, Schellenbach says, “That’s something I think about every now and then. It’s with every funding round you’re always committing yourself to several more years. I really enjoy working with our team; From engineering, to design and sales everyone is very focused on providing a good product for our customers. It’s a lot of fun to work together with a talented team that’s aligned around a goal.
“So, Plan A is to keep on growing, and eventually IPO the business, similar to companies like Agora, Adyen and SendGrid – that’s the ideal outcome. Let’s see how far we get, but that’s what we’re working towards,” he adds.
Image credits: GetStream
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