TikTok’s Ban Delayed, But Favorited Steps Up With $1.3 Million Funding

This social livestreaming software, with its gamified, creator-focused features, is promoting itself as an alternative to TikTok, providing creators with various opportunities to engage with their fans and earn money in a fast growing field.

When Donald Trump took office, TikTok’s future in the United States was called into question, with the app being blocked one day and then reinstated again. As the ban is now delayed, a new competitor to TikTok has appeared: Favorited. This social livestreaming software, with its gamified, creator-focused features, is promoting itself as an alternative to TikTok, providing creators with various opportunities to engage with their fans and earn money in a fast growing field.

Favorited’s recent $1.3 million pre-seed investment round has sparked interest for a number of reasons, not the least of which is the company’s ability to catch the attention of investors and influencers in a crowded market. The app, created by David Tesler and Zach Ferraro, borrows from TikTok Live’s playbook, but it stands apart by delivering interactive features, live battle, and a revenue-sharing mechanism that may appeal more to creators than anything given by major platforms.

The company’s tale begins in 2023, when founders David Tesler and Zach Ferraro collaborated to bring interactive livestreams to life. Tesler, who previously established the anonymous Q&A app Sendit, and Ferraro, who has worked with Curiosity.com, Famous Birthdays, and Fourthwall, set out to build a platform where creators and fans could interact in real time, socially, and competitively. This idea was quickly realised with Favorited, a platform that prioritises live interaction, gaming aspects, and a unique creative revenue model.

Favorited’s approach is distinctive in several ways. The app features a 70/30 revenue split for creators, far more favorable than platforms like TikTok Live, which typically takes a 50% cut. This creator-centric model is one of Favorited’s biggest selling points, allowing influencers and creators to earn more from their content. The app also introduces interactive games, leaderboards, and streaks, giving users the opportunity to participate in “battles” and collaborations during livestreams. Anyone with at least 100 followers can create their own streams, while anyone can join existing ones. The gifting feature, similar to TikTok Live, allows viewers to send virtual gifts to creators in exchange for real money, offering another avenue for monetization.

“Real human interaction is synchronous, real-time, and face-to-face, and our platform enables that at scale,” Ferraro shared with TechCrunch. “I think that we are nearing the end of the doom-scrolling era, and we want to usher in the age of ‘real social.’” This forward-thinking perspective underscores the founders’ belief in the power of genuine connections and interactive content. In their view, the future of content creation lies in platforms that foster collaboration and engagement in ways that go beyond passive consumption.

The new fundraising round has already proven to be an important turning point for Favorited, providing the firm with funds to fuel its expansion. In addition to product development, the money has allowed the company to expand from ten to twenty staff. This round’s backers include HF0, Soma Ventures, and a group of angel investors from the entertainment and social industries. The firm also took part in the a16z Speedrun accelerator program, which likely helped to Favorited’s current momentum.

Despite being a newcomer, Favorited is already making a significant impact in the competitive livestreaming space. The app is currently home to 1.3 million users, and some creators are making impressive earnings. TikTok influencer Jaysingzs, for example, reportedly earned over $40,000 in a single month by streaming on the platform. These early signs of success have set Favorited apart from other livestreaming apps, including whatnot, which raised $265 million earlier this year and now boasts a valuation of $4.97 billion. Similarly, RedNote, a Chinese alternative, recently reached the top spot for free apps in the U.S. App Store.

Favorited’s rise is noteworthy given the fierce competition, yet it continues to build traction in a unique way. “I worked on the side with David through 2023 and 2024 as he took the app through the a16z speedrun and pre-seed funding,” Ferraro explained. “This year I came on full-time as we have found real traction in mobile native livestreaming.” This focus on mobile-native livestreaming has contributed to the platform’s success, with Favorited recently peaking at around 1,000 downloads per minute.

As the app gains popularity, Favorited’s founders are already looking toward the future. With 750,000 users this year and thousands of new sign-ups daily, the company is gearing up to scale globally, although it currently has limited presence outside the U.S. Favorited also boasts a number of key features that set it apart from the competition, including the ability for creators to link their digital stores, giving them even more revenue-generating opportunities. However, unlike TikTok, Favorited does not have a discovery feed, which could pose challenges for new content creators hoping to grow their audience. Still, this limitation hasn’t stopped Favorited from making its mark on the livestreaming space.

The startup’s growth is not just reflected in its user base, but also in the financials. Favorited is now generating over $4 million in monthly revenue, and in the past week alone, creators on the platform received more than $2.5 million in gifts from viewers. As the app continues to gain ground, the founders are exploring discussions with strategic investors to secure additional capital, though Ferraro is confident that the company doesn’t necessarily need it.

Favorited’s rise in popularity can also be attributed to its ability to tap into the growing trend of gamified, social livestreaming, which resonates with both creators and audiences. “We’ve been number 1 in the app store for lifestyle since then,” Ferraro said, reflecting on the platform’s recent success. With a creator-focused revenue model, engaging features, and a strong early-stage track record, Favorited is certainly a startup to watch. Still, Favorited has already achieved something TikTok can only dream of—being the number-one lifestyle app in the U.S. app store.

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Picture of Anshika Mathews
Anshika Mathews
Anshika is the Senior Content Strategist for AIM Research. She holds a keen interest in technology and related policy-making and its impact on society. She can be reached at anshika.mathews@aimresearch.co
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