Cloud communications platform Agora has raised $70 million in Series C funding led by Coatue Management. Existing investors Morningside Venture Capital, Susquehanna International Group and Shunwei Capital, a fund backed by Xiaomi’s founder Lei Jun, also joined the round.
Agora received an undisclosed amount of Series A funding from Shunwei Capital in 2014, then closed a $60 million Series B funding in June this year from GGV Capital, Morningside Venture, SIG, Shunwei and IDG Capital.
Founded in 2014, the company is a real-time communications service provider, the first of its kind in China. It provides communications technology and cloud distribution services for video, audio, live streaming and voice calls.
Founder and CEO Zhao Bin is the former chief technology officer of Chinese social entertainment platform YY.com. When using these social platforms, users sometimes need to chat and Agora provides the technology to support high-quality real-time video and audio calls.
Agora has patented its Software Defined Real-time Network (SD-RTN), a real-time communications network which is headquartered in Silicon Valley. The company already has 200 distributed data centres around the world.
Apart from corporate services, the company also offers developers software development kits and application programming interfaces. Some of the Proceeds from the funding will be used for tech development to provide more tools for third-party developers.
Agora licenses its technology to a number of social media and live-streaming companies including Nasdaq-listed Momo and YY, as well as game live-streaming platform Douyu which plans to IPO soon. Agora also serves some overseas clients including India’s Hike Messenger, Japan’s LisPon and Stager Live.
But the startup has bigger plans. It already provides real-time communications for online education sites, and is now looking at municipal services including emergency medical services and police operations.
CEO Zhao Bin sees a market-size of over $8 billion in the real-time communications business driven by users in Asia, the US and Europe. The market continues to grow as user habits change, and video and audio start to replace text in communications.
Certainly, real-time communication is growing as online-streaming goes viral. According to research platform iiMedia Research, there were a total of 398 million online-streaming users last year. That number may grow to 460 million this year and continue to grow to 507 million in 2019. Huge traffic volume means a huge market for communications service providers such as Agora.
Big players are also stepping into this market. Alibaba, already a cloud service provider, is also managing real-time communications cloud services for traffic distribution, as is Tencent. As the leader in China's games industry, Tencent understands the potential for online games streaming. Providing a communications service is a natural next step for the Chinese games giant.
With Chinese streaming companies now looking abroad, the market is likely to continue to grow.
