Startup Launches to Bring E-Commerce to "Unboxing" Videos

Courtesy of Packagd
Unboxed

Packagd has raised $6 million in funding to bring its e-commerce-fueled video app Unboxed to market.

When Austin Evans posts a video on YouTube of himself unwrapping a new device, he regularly amasses half a million views. But there's no easy way for the interested, engaged audience that he has attracted to immediately buy the products he's showcasing and reviewing. 

Packagd, a new San Francisco startup, is looking to change that. 

The company, started by former Hulu and Flipboard CTO Eric Feng, launched Thursday with an app called Unboxed that offers a curated feed of tech-related videos that viewers can also shop — like a mobile version of QVC. Incubated at and backed by KPCB, where Feng is a general partner, Packagd has raised a $6 million round led by Forerunner Ventures and GV. 

So-called "unboxing" videos, which generate an estimated 10 billion views a month on YouTube, and other product-centric clips are "not reaching their full potential," says Feng, because there is no way to harness the purchasing power of the viewers. "That content is so valuable and interesting and popular that it deserves its own video service," he adds.

The company is working with YouTube stars in the tech and gadget space to create a programmed stream of videos. As a video plays about the best wireless headphones, for example, links to buy products such as the BeatsX Earphones show up at the bottom of the screen. Viewers can also comment or ask questions of the video host. 

Unlike other video startups that have tried to lure popular YouTube stars away from the platform, Packagd is not requiring its partners to create exclusive programming for the Unboxed app. Instead, it has sought permission from about 20 creators, including Evans, to distribute their videos in its app. If someone buys a product during one of their videos, they will get 100 percent of the affiliate fee that retail partner Best Buy pays out. 

Creators say they like being able to interact with fans while their videos play on Unboxed. "This is the first platform I've found that has this type of setup — live airings of pre-recorded content," says Andru Edwards, who hosts a YouTube channel with 130,000 subscribers called Gear Live. And by programming 30-minute shows made up of several of their videos, they have found new ways to engage with their audience. "Typically on YouTube, a viewer watches one video and moves on to the next, but with Unboxed I have their attention for the duration of the show," says Kevin Nether, aka The Tech Ninja, who has about 150,000 subscribers on YouTube.

At launch, Unboxed is programming videos for six hours each day. Users can also browse its indexed library of unboxing and gadget videos. 

Unboxed will look to generate income by having brands sponsor some of its programming blocks. Google-owned home-automation company Nest, for example, could sponsor a block of videos that shows YouTubers unboxing its latest products. "Audiences love to connect with brands themselves," notes Feng. "Sponsored content is not interfering " with other content, he adds, but serving as "a benefit to users." 

Eventually, Unboxed could also sell content directly. Although it would never be able to compete with big-box retailers, it could offer a curated selection of competitively priced products designed to appeal to its audience. "In limited beta testing, we've sold hundreds of products," says Feng, though he explains that the goal isn't to turn every viewer into a customer. 

Unboxed is the first in a series of e-commerce–fueled apps in the works at Packagd. The company is also planning to capitalize on similarly popular unboxing videos in the beauty and toy markets with dedicated apps for each that will launch later this year. 

"The overall retail industry is experiencing a seismic change as the consumer redefines the path to purchase," said Forerunner Ventures founder Kirsten Green in a statement. "With the increasing consumption of video, particularly on mobile devices, we see meaningful opportunity for a video-inspired commerce experience." 

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