Clubhouse's Funding Round could see it's Valuation Skyrocket; Facebook gets it's Foot in the Door
The new Live Audio platform takes off in the eyes of investors, but users are not so keen; other social media giants are getting involved to pre-empt the potential boom
Clubhouse is an invite-only audio-chat social media app that reached a year old last month, founded by Paul Davison and Rohan Seth based in San Fransisco. Some reports say that the apps popularity hit a peak earlier this year, but is now said to be on the decline. Nevertheless, Silicon Valley welcomed the app with open arms, and has recently been backed in its series C funding by venture capital firm Andreessen Horowitz, while neither party disclosed how much was raised, reports by Reuters and alike state that the funding could prompt a huge boost in the company's valuation, up to around $4 billion. other investors included DST Global, Tiger Global and Elad Gil. the funding round was confirmed by Clubhouse on Sunday following the story hitting headlines on Friday.
Some users of the app say that they dont see the long-term appeal, and are considering other options. In February Clubhouse appeared to boom when Elon Musk and Mark Zuckerberg joined within just a few days of each other. Talks of the app on social media also saw traction following Musk's request to the Russian President, Vladimir Putin to join the app for a conversation, which likely would have gained a lot of attention had it gone ahead. Many users were desperate to get in invite to the app, while others moved away from the platform. In an interview with CNBC social media analyst, Matt Navarra, said “I think the initial FOMO about getting a Clubhouse invite and trying it out has ebbed away". While the invite-only style of the platform may have boosted the apps initial popularity, this may have brought forward the wrong groups of people, which contributed to a gap in relevant content for users that see limitless categories on other social platforms.
Timothy Armoo, chief executive of Fanbytes, a company that helps brands to advertise via social media video content, stated that Clubhouse may also be loosing traction due to the easing of Covid restrictions seen in much of the world. Since its launch up until mid April, Clubhouse had been downloaded just 14.2 million times according to data shared by app tracking firm App Annie supplied to CNBC, which is far less than the average competitor. For example, TikTok was downloaded 500 million times in the five months leading up to April 2020 which brought the total download figure for the platform to 2 billion, according to app analytics firm Sensor Tower. An App Annie spokesperson stated that “As is with most app launches, there’s always a huge download in the first few weeks which tapers down".
Clubhouse was previously boasting a reported 10 million weekly active users during the mist of the pandemic lockdowns, but Armoo went on to state that “The elitists have left the building. Marc Andreessen isn’t doing stuff anymore. The allure of Clubhouse was that you could almost eavesdrop on interesting convos from interesting people. As the interesting people have left, what’s the point?”. Many users have stated that Clubhouse is loosing its traction because of the lack of relevant talks that users see when opening the app, essentially, the developers have not worked on the stickiness of the app, which is one of the reasons TikTok and Instagram have become so popular, especially in terms of weekly and monthly activity users and screen time usage. In a conversation with CNBC, one user said “I tried to get into it for a bit, but the only rooms it was showing me were run by the kinds of people who unironically call themselves ‘growth hackers’,” further mentioning that it appeared as though social media managers joined the platform before everyone else.
Further on this story; on Monday Facebook CEO Mark Zuckerberg revealed that the company plans to enter the social audio space. In a conversation broadcast on Discord, Zuckerberg told journalist Casey Newton “We think that audio is also going to be a first-class medium... Every once in a while a new medium comes along that can be adopted into a lot of different areas,” Zuckerberg said. “I think that’s going to be true with these live audio rooms.”
This is likely something to do with Zuckerberg's joining of clubhouse earlier this year in February, and following news of its valuation, decided to get its foot in the door of live audio platforms. The Clubhouse competitor, coined Live Audio Rooms, will soon debut, and users will be able to chat in real time. The feature will be tested first within Facebook Groups and with public figures, but in blog post on Monday they said that they expect the rooms “to be available to everyone on the Facebook app by the summer.”. While live audio is certainly not a new medium nor anything innovative, this has not stopped Facebook branching out, like many other of the additions that they have made to the Facebook platform. But many social platforms are expecting this kind of media to take off, with many of teh major platforms working not heir own version of the feature; Twitter Audio Spaces, Reddit Talk, even LinkedIn. It's likely that these major social media players getting involved in live audio will add to teh dampening of success for Clubhouse, especially as a single feature platform.
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