Users Flock to New Communications Platforms Like Hello Pal, Telegram

Communication platforms like Facebook’s WhatsApp are a topic of controversy today after the popular application demanded users either agree to share their data with Facebook and its family of companies or switch to a different app. Users, which are increasingly sensitive to handing over their information with tech giants, are responding…by switching to different apps.

Facebook (NASDAQ:FB) shelled out $19 billion to acquire WhatsApp in 2014, later (in 2016) implementing policy that allowed users to opt out of sharing data like pictures and phone numbers on their mobile device with Facebook. The new rules reverse that policy and users don’t seem happy about it.

Privately-owned instant messaging company Telegram reported on Wednesday that it has added 25 million new users from around the world in 72 hours, according to the Durov’s Channel on the app. Brothers Nikolai and Pavel Durov co-founded and launched Telegram in 2013, subsequent to selling their social network VK to the Group.

For its part, Vancouver-based Hello Pal (CSE: HP)(OTC: HLLPF) on Wednesday trumpeted success for its eponymous app, where growing active users fueled stellar revenue growth in 2020. More than just an instant messaging service, Hello Pal differentiates itself as a suite of international live-streaming, social messaging and language learning mobile apps.

The Hello Pal app leans heavily into interaction between users, whether it is for travel, learning a foreign language, meeting new people or communicating with existing friends. This is particularly evident through the company’s livestreaming services, where people can earn money (or “gifts”) by broadcasting, and the recent launch of a 1-on-1 live video matching service.

Laying the foundation of the company with livestreaming integration in 2019, Hello Pal has been largely focused on penetrating the massive Chinese markets, with strategic expansion into new regions ongoing. The strategy began unlocking value in the company in 2020, its first full year of revenue.

Starting the year with revenue of 1 million renminbi (RMB), equal to about CDN$200,000, the app built tailwinds that didn’t relent. By the end of 2020, monthly revenue rose to more than 10.8 million RMB, or $2.1 million Canadian dollars, an increase of over 900% from January.

For the year, Hello Pal reports revenue 60.0 million RMB (CDN$10.2 million) while also achieving strong cash flow that exceeded ongoing operating expense.

Importantly, these totals haven’t begun to reflect the launch of the video matching service in December or the introduction of a new VIP monthly subscription service that provides access to additional features on the platform.

Saying it’s rewarding to see the work from 2019 paying off already, Hello Pal CEO KL Wong gave investors a bit of teaser about improving top and bottom lines related to the new video matching services in commenting “[w]e look forward to reaping its benefits this year.”

In a world where new social applications outside the incumbents are gaining popularity, market participants are taking notice of users adopting the Hello Pal app and the rising sales numbers. Toronto-listed shares of HP were trading at 8 cents on November 9 and rose to a 52-week high at 31 cents on December 10 before consolidating a bit. In Wednesday action, the stock is up 4.3% at 24.5 cents, representing its third positive day in the last four.

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