Clubhouse closes new round of funding that would value app at $4B
reuters.com
reuters.com
They had a pop-culture bump a few months ago, but are down since then.
A $4B valuation with 'speculation / risk built in' means they really think it's worth $20-50B.
FYI to those commenting that Twitter/FB will have the same features, I don't believe that this is the threat, as the specific nature of the experience matters as well as even the brand etc.. The 'risk' for Clubhouse is merely that the experience doesn't scale and is not interesting to most people, which I think will be the case.
The number of this-is-how-I-got-rich-you-can-too rooms is just far too much.
The most important limitation I see is that the ephemeral nature of the content means we can't 'let the good stuff come to the top' meaning - you have to sit and slog through the audio yourself to get to the nuggets. TikTok 'works' because they quickly move the uninteresting stuff to the background. And of course, without serious monetization, the big names who draw crowds will stay away, although that could change.
This is short term but worth a look [1]
[1] https://trends.google.com/trends/explore?geo=US&q=clubhouse
I may be out of the loop, but that's not* how I learned to valuate startups. On the contrary, the VC valuation I learned to calculate was usually a bit higher than expected market value.
For growth companies, the likelihood of failure tends to be lower, but this company is in many ways still at 'seed stage' dynamics with no established base, business plan, revenue, still in a closed beta etc. etc. and a high likelihood of failing.
They're not going to invest at some number largely different from 'what they believe it's worth'.
But your statement misses my implication that the risk profile is 'out of sync' for this kind of investment, at this stage.
Normally, when companies get into the 'multibillion dollar range' - they have established business operations and they can make crude, ballpark assessments with respect to outcomes. Companies with multi-billion dollar valuation tend not to fail - so the 'valuation' process would be a calculation of 'present value of cash flows' for the giant market the company is in, what the market will bear etc.. It's a giant guess, but an informed one.
Clubhouse is at 'seed stage' in terms of operations - this means, that unlike regular B-round companies with $4B valuations - they're still a total crapshoot. Stripe, when it was at $4B had a growing business. Clubhouse has mostly just a lot of hype, no revenues, no business model, no celebrity backing, and I'm going to imagine not much of a daily-active user base. (Obviously AZ has access to internal metrics and we don't know what those are).
So when you consider Stripe at $4B valuation has a 90% chance of surviving as a business, and Clubhouse at $4B probably a 33% chance of surviving as a business - that says a lot. It effectively means that before the failure risk adjustment, the belief is that Clubhouse would be substantially bigger business.
At these giant valuations AZ is putting in quite a lot of money, they actually cannot afford to take risks that big, there's some weird dynamics going on with this. There's definitely a 'new game' being played with monster valuations that's a crazy poker hand with a lot of chips in the pile.
I have no firsthand experience of Clubhouse, but what I understand is that it's a 'follower' model, in which you have to decide how willing you are to miss out on what Celebrity X has to say. That would make for a pretty good approimation of a bayesian algorithm in which everyone decides for themselves how important everyone else's opinion is, which could actually work better than a lot of the competing algos.
Without an Android app in sight, they know they are losing so they begin tossing more cash onto an iOS-only private invite-only members app and value it at $4B.
No wonder a16z is aggressively spamming notifications all over the place on there.
Every single investor is going to be writing this off in 2 years when every other social network copies them more successfully and faster.
A few weeks later it kinda blew up and I heard it was iOS only. I was pretty sure I had installed the official version, so I downloaded my google data and found it in the JSON.
I installed clubhouse on Android, off the playstore, the official app. Not sure why it's not available any more.
Not unlike Slack.
Those same people: OMG Social Audio is where it's at!
Clubhouse needs celebrities, otherwise it'll be inundated with marketing 'gurus', crypto scammers and 'channel your inner alpha male' types that the Internet is already filled to the brim with.