[Korean Startup Interview] SquadX Spearheads Revolutionary Growth in Short-Form Content, Aiming for Global Market Expansion by 2025

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According to the “2023 Short-form Marketing Guide” released by MezzoMedia, a digital marketing solutions company, the popularity of short-form content, which initially began among teenagers, has now spread to include users in their 20s and 30s. The usage among individuals in their 20s has increased by 324%, and for those in their 30s, by 250% compared to two years ago.

The global market for short-form content is projected to grow to over KRW 3 trillion within the next decade. This growth is indicative of the era’s preference for short videos, establishing short-form content as a promising medium. With the market’s expansion, brands, platforms, and corporations are actively leveraging the appeal of short-form content to engage consumer interest and drive purchases.

In response to the rising demand for unique and efficient short-form content tailored to specific audiences, the Korean startup SquadX has developed and launched a comprehensive B2B shoppable video SaaS (Software as a Service) solution for short-form content. “BrixPlus,” SquadX’s shoppable media commerce integrated SaaS solution, and “BrixStudio,” its media content production and marketing service, offer a combination of short-form, live broadcasting, and video communication features.

Short-form content is rapidly emerging as a popular medium for casual viewing, offering more product information than image-based content while being less burdensome than traditional videos. To facilitate product purchases through platforms like reels and YouTube Shorts, SquadX’s SaaS solution provides bidirectional live services and server technology capable of handling large-scale chat services.

As of August this year, BrixPlus has secured supply contracts with approximately 20 companies, and BrixStudio is actively producing live commerce broadcasts and short-form content for 8 companies. Founded in 2022, SquadX aims to cater to the 250,000 online stores in the domestic market with optimized media commerce content.

Led by media platform expert Co-CEO Kwon Jung-sik and entertainment content and marketing specialist Co-CEO Choi Young-hyun, along with a team of 16 media professionals, the company is dedicated to providing differentiated content. Leveraging over 20 years of experience in major domestic companies such as CJ ENM, Samsung Electronics, and Kakao Entertainment, they aspire to lead in the trends of live commerce and short-form content. Recognized for their technological expertise and selected for the TIPS (Tech Incubator Program for Startup) with the backing of KB Investment, SquadX is planning rapid expansion and entry into global markets.

Co-CEOs Kwon Jung-sik and Choi Young-hyun have stated, “Building on our domestic success, we are planning a global expansion starting in the second half of 2024. We aim to target markets in Southeast Asia and Japan, including Thailand, the Philippines, and Vietnam, with the objective of achieving significant global expansion by 2025.”

What problem is SquadX aiming to solve?

The trend of media commerce, where consumers purchase products through live commerce and short-form videos on home shopping and brand company online stores, is rapidly spreading. However, these companies face significant challenges in developing their own video solutions due to technical complexity and high costs.

To address this, SquadX has launched a shoppable video integrated SaaS (Software as a Service) solution to implement media commerce in these online stores.

How does SquadX approach the solution?

While live commerce has been a major trend in the commerce market, there’s a rapid shift towards short-form video consumption. Companies offering live commerce SaaS solutions are now launching short-form commerce SaaS solutions to meet market needs.

SquadX was the first in the industry to launch a shoppable video integrated SaaS solution, BrixPlus, last year, enabling home shopping and brand companies to quickly adopt short-form media commerce.

Home shopping and brand companies, traditionally focused on live commerce, can now implement short-form video product introductions and consumer reviews by adopting BrixPlus in their online stores. This evolution allows these stores to move beyond merely selling products and develop into short-form-centric brand communities where consumers can create and engage with short-form content.

What are SquadX’s competitive advantages?

SquadX is founded by senior members with top-tier media technology expertise in Korea and offers distinct features in its media commerce SaaS solution.

In live commerce, real-time interaction between show hosts and consumers through comments is crucial. BrixPlus supports this with a “sub-three-second ultra-low latency broadcasting feature.” It also offers a “multi-cloud infrastructure” to integrate with the diverse cloud environments of companies adopting BrixPlus.

Traditional live commerce SaaS solutions do not allow consumer participation in real-time comments during rebroadcasts, leading to low purchase conversion rates. BrixPlus, designed with a separated broadcast and comment module and pending patent, enables consumer participation in comments during rebroadcasts, significantly increasing purchase efficiency.

BrixPlus also offers features for short-form commerce. It provides a short-form product introduction function on product detail pages and a separate mobile SDK and PC web-based short-form video editor, enabling easy shooting and editing of short-form review videos by consumers. This facilitates easier adoption of short-form commerce by client companies.

Future plans include offering an AI-based personalized content engine and an automatic short-form video editor to recommend short-form videos tailored to individual consumer preferences.

What services does SquadX provide?

SquadX is a media commerce company that assists commerce businesses in rapidly adopting video-centric media commerce. Its business areas are mainly divided into two segments: ‘BrixPlus,’ a shoppable video integrated SaaS (Software as a Service) solution, and ‘BrixStudio,’ a service for producing and marketing commerce content.

‘BrixPlus’ is the industry’s first integrated shoppable video SaaS solution. It facilitates the implementation of live commerce and short-form content in online stores, thereby improving consumer purchase conversion rates.

‘BrixStudio’ produces various commerce-related content, including live commerce broadcasts and short-form videos. It also engages in marketing activities to attract viewers for live broadcasts and to promote the spread of short-form videos.

In contrast to the standardized format of live commerce broadcasts, future plans include creating new types of original commerce content that integrate entertainment content formats and gaming features. These will be broadcast through domestic home shopping channels and brand company online stores.

Who is SquadX’s target market and primary customer base?

The domestic live commerce market in 2023 is estimated to be about 10 trillion won, with the media commerce market, including short-form content, growing even faster. The demand for media commerce solutions is increasing among home shopping channels, brand company-owned malls, as well as small and medium-sized enterprises (SMEs) and micro-businesses. It is estimated that there are over 250,000 online stores in Korea, with more than 70,000 currently active.

SquadX provides solutions and content services to implement optimized media commerce, focusing on five categories: fashion, beauty, living, food, and travel. Their core targets are home shopping channels and top brand company malls in each category, and they are gradually expanding their customer reach into the SME market.

What is SquadX’s business model?

The ‘BrixPlus’ solution is offered as a service comprising an initial one-time integration fee plus a monthly subscription. The monthly fee is tailored based on various factors, such as the number of broadcasts or content items, average viewer numbers, and average viewing duration for each client’s online store. When utilizing ‘BrixStudio’ for content production and marketing, a commission fee of about 10-30% of the total budget is applied.

What are SquadX’s achievements?

Currently, SquadX’s ‘BrixPlus’ and ‘BrixStudio’ are provided to approximately 20 large and small enterprises in Korea, including Lotte Home Shopping, AmorePacific, HanaTour, SK Rent-a-Car, Beauty Selection, and Louis Quatorze. In April 2022, they secured seed investment from CATENOID and GAUSS CAPITAL MANAGEMENT. In September 2023, they received pre-Series A investment from KB Investment, IBK, AC Pathfinder, and CNTTECH. They won the Minister of Science and ICT Award in December 2022, were selected for the Initial Startup Package in May 2023, chosen for TIPS in June, and hold five patents related to media commerce.

What are SquadX’s team strengths?

SquadX, established in February 2022, is a startup formed by 16 veteran media experts. It was co-founded by Kwon Jung-sik, a media platform specialist, and Choi Young-hyun, an expert in entertainment content and marketing. They have accumulated a wide range of media experience over the past 20 years, having worked with major domestic companies such as CJ ENM, Samsung Electronics, and Kakao Entertainment.

Most of the company’s members hail from CJ ENM, possessing top-tier expertise in media technology and content from their experience in broadcasting. This expertise aligns well with current trends, including live commerce and short-form content. The team is committed to providing services that go beyond simple live broadcasting, focusing on a deep understanding of media mediums.

Three Reasons Why Investment is Essential:

Firstly, as SquadX was founded by senior veterans, it boasts the advantage of rapid growth and a clear exit strategy.

Secondly, SquadX has been generating revenue since its inception year, having established contracts with home shopping networks and large corporations even before launching its solution. The company is experiencing rapid growth and is targeting to reach its break-even point by 2024.

Thirdly, SquadX is conducting a performance-based business, considering possibilities for mergers and acquisitions with home shopping networks or large corporations, or exploring special listing options due to its technology, to enable a swift exit.

Are there plans for global expansion?

South Korea is one of the fastest-growing markets in the global media commerce sector. Leveraging our domestic success, we plan to initiate global expansion in the second half of 2024. Our initial focus will be on Southeast Asian and Japanese markets, including Thailand, the Philippines, Vietnam, Indonesia, and Malaysia, with plans to expand further into additional regions by 2025.

[Korean Commerce Startup News]

와우테일(WOWTALE)