Clubhouse, the new audio-based social media app, seems to be on everyone’s minds in recent weeks. The platform, based on real-time audio communications, has become very popular in a very short time. Last month, the company raised $100 million, based on a valuation of $1 billion.
Less known is the fact that behind’s Clubhouse user-friendly interface stands another company called Agora, which is based in Shanghai. An American-Chinese company, Agora provides audio-visual platforms sold to customers on a per-minute basis. It serves thousands of companies, ranging from large corporations to small start-ups, with services such as video conferences, event streaming, and even remote health services.
Agora has an Israeli on its management team, Regev Yativ. He serves as the company’s Chief Operating Officer and Chief Revenue Officer, and in a conversation with Haaretz he talks about the company, its challenges and even its Chinese connection. This later aspect sparked concerns about Clubhouse, which was banned in China this month.
Yativ explains that though Agora “was initially a very small team, there was a sense that the issue of real-time engagement by internet users was going to be a big one. There was a clear feeling, even before the coronavirus pandemic, that the way people talk to each other is going to change dramatically”, he says in an interview.
“This is a transformation that began with video services, with users no longer remaining passive. People wanted to be engaged with content, they wanted some form of interaction. This happened in tandem with the democratization of the content production – people started to broadcast themselves,” he says.
Alongside examples like TikTok or so-called Instagram stories, another expression of this process is the revolution that’s taken place in recent years in the gaming community through live-streaming platforms such as Twitch. All this means that more and more programs and platforms needed to provide video and audio services.
Saying no to closed platforms
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The second trend Agora is riding on is what’s called Application Programming Interfaces. So-called APIs allow programs to interface with one another in a simple and quick manner. Imagine using a taxi or raid-hailing app. Much of what you actually see and experience was not created by the company which owns the app - but was actually put together using different components, like pieces of a puzzle that together form the final product. Charging your credit card is done by one provider (Stripe, for example); the map displayed on your screen comes from another provider (such as Google, for example) and the screen with the registration and billing comes from two other companies. Thus, an entire economy of “under the hood” technological solutions as emerged through APIs that help support the apps we know and use.
“There are many companies today, including Agora, whose success will be determined by the number of developers who like the product and put it to use,” explains Yativ. “Developers don’t like closed platforms that you can’t interact with. What developers like is to have a product that can be embedded into their software and to which they make adaptations as they see fit. Things like how many windows are open in any video chat, or how many people can get permission from to host. The screen dynamics, for example, is something that can change.”
The uses of Agora’s product are manifold, explains Yativ. It could involve facilitating a brainstorming session on a platform that provides virtual whiteboards for organizations, or giving virtual classes. The platform also enables softwares that host virtual conferencing. “We don’t interfere with how a developer creates his app, we want to make their dream come true,” he says.
Agora allows users to download its app for free for the first ten thousand minutes, after which it starts charging a fee. It charges $1 for 1,000 minutes of audio conversation and $4 for 1,000 minutes of using video. The company currently has more than 200,000 developers using its platform.
Agora’s challenge is to provide high video quality with low latency, which is the time between initiating a process and the time it starts executing it. For this purpose, Agora has a network of servers spread across 250 locations around the world. “This global network allows us to achieve a latency of less than 400 milliseconds,” says Yativ, who claims that this is an exceptional value in the trade.
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Agora was founded in 2014 by Tony Zhao as a “garage” company in Palo Alto, California. Zhao comes from Webex, Cisco’s solution for video chats. It’s interesting to note that another Webex “refugee” is Eric Yuan, who went on to found Zoom. Agora operated as a private company in its early years, and was listed on Nasdaq last June. On the day of its initial public offering, its value jumped by 145 percent. The company chose an interesting ticker symbol for itself: API, in line with its field of operations.
According to its quarterly and annual report for 2020, published this week, Agora transmits 48 billion minutes a month through its platform. Its revenues for 2020 stood at $133 million, a 107 percent increase relative to the preceding year. The company reported having 2,095 customers (meaning companies that use its platform), a 101 percent increase relative to the previous year. Though Clubhouse’s success also provided a win for Agora, it also has much heftier clients - such as Bilibili, a Chinese video-sharing company worth $45 billion.
Clubhouse is not officially mentioned anywhere as a customer, but Agora’s website mentions other customers, including a dating site called MeetMe, a learning platform called Hallo, and a company dealing in online psychological treatment called Talkspace, set up by Israeli entrepreneurs Roni and Oren Frank.
“The Israeli market is very important to us because of the presence of many start-up companies here” says Yativ, who is based in the U.S.. “Many companies you know are already working with us, but in most cases, you wouldn’t know that it’s us providing the video for them.” Other customers in the start-up world include Comunix, an Israeli company that enables people to play poker online with friends, around a virtual table, with live video used by participants. Another company is Livekick, an online platform for yoga training and meditation. That company was also founded by Israelis. If you wish to experience Agora’s video instead of Zoom, the company allows you to do so unlimited and for free, at videocall.agora.io.
The Chinese connection
Agora is obviously not the only player in this market. It competes with Twilio, a giant company traded at a valuation of $62 billion (Agora is worth $7.2 billion). Other competitors are Vonage, traded at a valuation of $3.2 billion. But competition is currently not Agora’s greatest worry. One of its problems is that it's half-based in China, with headquarters in Shanghai, raising privacy concerns.
Researchers from the Stanford Internet Observatory confirmed publicly that Agora was used in Clubhouse. In a report, they said they found that “user’s unique Clubhouse ID number and chatroom ID are transmitted in plaintext, and Agora would likely have access to users’ raw audio, potentially providing access to the Chinese government.”
A few days later, Clubhouse announced a breach in its security, which potentially allowed unauthorized hackers to listen in on conversations.
An Agora spokesman told Reuters at the time that the company had no comment on any relationship with Clubhouse, but that Agora does not have access to or store personal data, and does not route through China voice or video traffic generated from users outside China, including U.S. users. Agora provides software that allows customers "to build their security and privacy infrastructure in a way that is both compliant and relevant to their end-users," the spokesman wrote in an e-mail.
Without relating to that specific incident, Yativ says that “we provide the development environment for apps. As such, we do not collect any identifying or private information of any kind. We have no access to users or to their credit cards, or to any other such information. Moreover, Agora provides developers with all the tools they need - including end-to-end encryption of transmission, and for those who want it we provide ‘geofence’ capabilities (locking access to certain geographical areas), so that they can limit transmissions of data only to the U.S., Europe or anywhere else they choose. We take privacy and security issues very seriously, abiding by all regulatory rules, including those set by the ISO and GDPR.”
Yativ is a veteran of the technology industry. Before his job in Agora, he was the VP for sales at Redis labs, before that serving for 11 years as Chief U.S. Operations Officer for Magic Software.