The pandemic made organisations around the world nervous, and some even succumbed to it. Amsterdam-born Stream is one of those startups that were initially worried about the impact of the Covid-19 pandemic. However, even though the initial impact of the pandemic was severe, the company’s Chat messaging platform API & SDKs proved to be a saviour for it.
According to the company, it experienced a 517 per cent increase in revenue from its chat API product in 2020, while more than doubling its chat and activity feed user base to support over one billion end users.
In an exclusive conversation with Silicon Canals, Stream’s co-founder & CEO Thierry Schellenbach, says, “Companies across all sectors have significantly beefed up their online operations in the past year, and messaging capabilities are an important component of that. We’ve especially seen an increase in demand for a chat solution from companies in healthcare, education and live events. The prevalence of telemedicine, remote learning and virtual events have contributed to our accelerated growth. We’ve seen these sectors grow seemingly overnight, but I think these use-cases are here to stay.”
In a recent development, Stream, the creator of the enterprise-grade activity feed and chat APIs, has raised $38M (approx €31.85M) in its Series B round of funding. With this round, the company has raised a total funding of $53M (approx €44.4M), to date.
The current funding follows the company’s $15M (approx €12.57M) Series A round, which it secured in August 2020.
Investors in the latest round
Additional investors in the round include Olivier Pomel, CEO of Datadog; Tom Preston-Werner, co-founder of GitHub; Amsterdam-based Knight Capital; Johnny Boufarhat, founder and CEO of Hopin; and Selcuk Atli, co-founder and CEO of Bunch.
On being asked how the company raised this new round so quickly, Schellenbach replies, “We weren’t planning to seek additional funding until late 2021 at the earliest, however, we were introduced to Aydin Senkut (Founding and managing partner at Felicis Ventures) not too long after our Series A, and he expressed a lot of interest in our technology and vision.”
“Because we weren’t on a timeline where we needed funding, it gave us the opportunity to have a dialogue over the course of several months and get to know each other. That cultivated a really strong partnership for Series B financing,” he further adds.
Senkut, an original super angel turned multi-stage investor, is well-known for backing Shopify, Fitbit, Rovio, PluralSight, and API-focused startup Adyen.
What does Stream offer?
Stream is an enterprise-grade chat and activity feed provider. Its platform provides APIs to help product teams build chat and activity feeds for their applications. Stream claims to be a fast, scalable solution on the market today, that enables application product teams to increase user engagement and retention as well as decrease time to market.
Schellenbach says, “The API economy creates a golden age for engineers and product teams. With a proven API foundation to build on, teams go from concept to launch in a fraction of the time it would take to develop comparable functionality from scratch. The boost in efficiency allows engineers to focus on core features that differentiate their product instead of reinventing the wheel.”
The company was founded by Schellenbach and CTO Tommaso Barbugli in Amsterdam. It participated in the Techstars NYC accelerator program in 2015 and subsequently moved its headquarters to Boulder, Colorado. Today, Stream employs about 100 people in Amsterdam, Boulder, and remotely.
Stream’s products also include UI kit; scalable APIs; frontend components for React, React Native, Flutter, iOS, or Android; integrated machine learning; and a management dashboard.
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.”
The platform works with customers in sectors including healthcare, education, finance, virtual events, dating, and social. Some of its customers include TaskRabbit, NBC Sports, Unilever, Delivery Hero, Gojek, eToro, and Stanford University.
Stream is planning to invest in scaling its global team. In 2020, the team tripled in size, and with the recent funding round, the company will hire an estimated 50 people.
Why move from Europe to the US?
Back in September 2020, Schellenbach told us that one of the key reasons why he decided to move to the US was because fundraising in the US is easier than in Europe.
He said, “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.”
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).”
In that email, Shah shared his struggles and said that he wanted to invest $100K (about €85.6K) in Stream, and since Shah was busy at the time, he did not care about the terms of the investment.
Schellenbach mentions that something like this never happened to him while he was operating in Europe.