Clubhouse Closes New Financing at $4 Billion Valuation
Clubhouse CEO Paul Davison announced Sunday in a town hall meeting held in the app and in a blog post that the company has raised a Series C funding round just four months after closing a Series B round. Davison did not disclose the size of the financing in either venue, but Reuters is reporting that the funding brings Clubhouse’s valuation to $4 billion. That is up sharply from a reported $1 billion valuation in January.
The financing includes existing investor Andreessen Horowitz, along with DST Global, Tiger Global and Elad Gil. Andrew Chen of Andreessen Horowitz managed the financing for the firm. Earlier this month, Bloomberg reported that Twitter had held discussions with Clubhouse about an acquisition at a $4 billion valuation. So, it is not surprising that the new valuation benchmark was used for additional financing.
Building Out Infrastructure and the Team
The company rose from two million weekly active users in January to over 10 million a month later. This rapid growth has had noticeable impacts on users as acknowledged in the company blog post:
It’s no secret that our servers have struggled a bit these past few months, and that our growth has outpaced the early discovery algorithms our small team originally built.
Clubhouse has quadrupled its team since the beginning of January including new staff to work on Android development in February, adding a beta of a creator payments feature earlier this month, and launching a “Creator First accelerator.” And, the company expects to use the new funds to accelerate hiring. The blog post concluded, “Fundraising is only important because it allows us to keep focusing on the product and the community, and we’re so excited to continue to build Clubhouse with you. We are hiring across all areas, so if you are excited about our mission, we’d love to hear from you.” You can read the full blog post here.
Beyond hiring, the computing infrastructure requirements are growing quickly and the app is only available today for iPhone users. When Clubhouse does launch for Android, there is expected to be another flood of users creating more strain on the strapped server infrastructure. The computing and bandwidth costs for non-stop audio chat by millions of users can become expensive very quickly.
Social Audio Heats Up
Clubhouse already had formidable competition in social audio. Twitter Spaces is already operating a social audio experience for an increasingly large beta testing group and plans to make it generally available this month. Mark Zuckerberg is expected to discuss Facebook’s social audio plans later today. The sport-themed social audio app Locker Room was recently acquired by Spotify.
It is clear that there will soon be dozens of social audio outlets for consumers as both dedicated apps and as features of existing social media platforms. In addition to Facebook and Twitter, social media giants LinkedIn and Reddit are also said to be working on audio chat features. All of these companies have large existing user bases and threaten to fragment the social audio landscape. Clubhouse no doubt sees the urgency of staying ahead of competitors and pushing user growth before rivals can establish their own capabilities. It now has a larger war chest to do that.
Follow @bretkinsella Follow @voicebotai
Facebook Scrambles to Pull Fake Clubhouse Ads Full of Malware
