INDUSTRY SPOTLIGHT

Social Media

Dive into a dynamic and burgeoning realm of the social media industry. Discover the opportunities to seize and the challenges to navigate to stand out in this fiercely competitive landscape.

Ride the social wave today

Driven by the insatiable human desire for social interactions and instant information, coupled with technological advancements, the social media industry is on the rise. Niche platforms, AR and VR, audio-based platforms, ephemeral content—opportunities seem endless, but so do the challenges. Thus… 

The sailing won’t be smooth

First, you enter a cutthroat environment. With market giants like Twitter/X, Facebook, Instagram, and TikTok dominating the scene, breaking through the noise becomes extremely challenging.

And with monetization hurdles and data privacy concerns, it turns into a Herculean task. To avoid repeating the poor fate of Google+, Ello, or Vero, social media startups must concentrate on honing their concept, as well as market entry and fundraising strategies. Thus…

You need more than just a genius idea!

With an impressive track record of successful fundraising, growth and M&A projects in over 80 verticals, including social media, at Waveup, we know the game all too well. Here, we share with you some insights from our social media market research to introduce you to some pros and cons of the playground. 

4.9B
In 2023, around 4.9 billion people are using social media across the world.

 

$49B+
The social media app market in 2022 was valued at $49.09 billion.

9/10

Approximately 90% of social media users access platforms through mobile devices, underscoring the pervasive nature of these platforms in daily life.

30%

Social media platforms are pivotal in e-commerce, driving over 30% of website referral traffic to online retail sites, highlighting their role in shaping consumer purchasing decisions.

7/10

Social media extends beyond the younger generation; 68% of adults aged 50 to 64 use at least one social media site, demonstrating its broad age-spanning influence.

VENTURE LANDSCAPE

The social media venture capital market size was valued at $11.1B in 2022

With the major deals going to:

Leading social media venture capital firms

Write to us to know more

WAVEUP VIEW

The challenges of social media startups

Taming competition

Being dominated by the top dogs such as Meta’s Facebook and Instagram, and Twitter/X, the social media space is like a turbulent ocean: appealing yet dangerous, with survival far from guaranteed. Newcomers need to carve out a distinctive niche to secure their place and avoid the fate of platforms like Ello, which, despite its promise as an ad-free Facebook alternative, struggled to maintain traction.

Climbing monetization mountain

Driving revenue can be an uphill battle for social media startups, since introducing ads or premium features often alienates users. A 2018 study showed that 51% of users unfollowed brands on social media due to bothersome content, while 45% did the same because of excessive self-promotion. Plus, in such a cutthroat market, garnering investment is no easy task. Thus, it’s crucial for social media startups to strike the right balance and deliver a compelling, unique value proposition.

Balancing data sharing

Data breaches, misuse of personal data, and lack of transparent privacy policies can quickly undermine user trust. The recent Edelman Trust Barometer report showed that every eighth respondent considered trust as pivotal when choosing a brand. For example, the infamous Cambridge Analytica scandal and the following 2021 data theft incident have resulted in numerous fines and a major blowback from the Meta’s users. These failures highlight the importance yet difficulty of implementing strong data security and privacy measures for social media startups.

How we can help

Startups
Fundraising advisory

From diligent industry analysis to storytelling and financial forecasts, we’re helping founders crystallize and structure key business fundamentals and translate them into a compelling investment opportunity framed in a winning social media pitch deck.

Investors
Due diligence and portfolio support

Evaluating potential investments, conducting due diligence, and supporting portfolio companies on their new fundraising rounds.

Established companies
Growth hacking

Discovering market opportunities in the market and developing execution strategies to build actionable and scalable blueprints for growth.

WHO WE ARE

Unlocking your next stage of growth

Waveup is a leading global advisory empowering companies to fuel growth, attract investments, and secure strategic partnerships.

We turn data into business insights that drive results, helping companies excel in the competitive B2C and B2B spaces across 50+ verticals, discovering and catalizing opportunities for growth.

Our investment consulting services for social media startups

Market intelligence

Fundraising support

Pitch decks

Financial models

Investor research

Growth consulting

Go-to-market strategies

Marketing/sales materials

Design support

Learn more

FAQ

What makes the industry appealing for social media financing opportunities?

Social media sector is an ever-changing playing field with fresh opportunities and startups that offer high returns. And with e-commerce integration, content monetization, and adaptability to trends adding fuel to the fire, the social media industry is a golden mine for VCs.

What is the current size of the social media market, and its potential for future social media startups?

In 2022, the social media market was valued at $231B+. Being a constantly growing and tech influenced industry, social media provides a vast scope of opportunities for startups that can cater to emerging sector needs and customer preferences.

How challenging is it to secure funding for social media startups nowadays?

Securing funds has recently become more challenging due to a saturated market dominated by giants like Facebook, Twitter, and TikTok. Investors often look for unique value propositions or disruptive innovations before putting their money behind new entrants. But with fresh, original, and scalable solutions, startups can still attract capital, as it happened to Clubhouse.

How long does it take to create a social media pitch deck and a financial model for a social media startup?

We usually define the time frames for project execution individually. Many aspects matter in this case, such as project complexity, our current workload, etc. But just to give a glimpse—we need between two to three weeks on average.

What are the key mistakes social media startups make in their pitch decks?

Most social media pitch decks we reviewed don’t address the question of why they selected this exact market/ideal customer persona and lack a clear differentiation strategy and traction signals. Another problem is the team slide featuring only the founder or lacking any substantial information about the team members, which fails to demonstrate investors you have a team/market fit.

What are the main challenges social media startups face, and how are they tackling them?

For sure, competition is the key challenge social media startups must tackle. But, securing funds and data privacy hurdles can also hinder their progress. To address these issues, social media companies should implement effective business models, invest in user data protection, and experiment with AI or AR to attract investors’ attention.

How competitive is the social media market?

The social media market is a veritable battleground, with giants like Facebook, Instagram, Twitter/X and Pinterest holding the lion’s share. But with the right niche and a unique value proposition, startups can distinguish themselves in this competitive landscape.

What services do you provide for investors who are either considering or have already invested in social media startups?

Evaluating the specifics of social media projects through due diligence, assessing the true value of investment opportunities, and providing comprehensive fundraising guidance for the partner fund’s portfolio companies—these are some of the services we offer to investors.

Do you provide social media M&A support?

Certainly! We stand prepared to unearth social media M&A opportunities, craft a robust CIM, and execute modeling for both purchase and sale deals. This includes analyzing market trends, evaluating brand compatibility, and ensuring that financial metrics align with your strategic objectives. Our comprehensive approach will guide you through each phase of the M&A process, ensuring a seamless transition and maximum value realization.

Do you make intros to social media VCs?

Of course! If your project meets the criteria, such as round size, team dynamics, product quality, and more, we can help you connect with social media-focused VCs. This service is a cornerstone of our investor relations package, dedicated to forging ties with VCs, preparing startups for the first meetings, and ensuring post-deal collaborations.

Do you provide comprehensive social media market research on request?

Undoubtedly! Our specialists provide bespoke insights into the social media market, including detailed industry reports, competitor evaluations, and comprehensive market studies to place you at the forefront.

Which social media startup funding stages do you assist with?

We provide fundraising and growth support to social media startups of all stages, from Pre-Seed to Series C+, with the vast majority of our successful projects concentrating within Seed to Series B stages.

Industries we work with

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