The pandemic drove Clubhouse to a $4 billion valuation that never looked sustainable - 2023-04-27

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F0.png The pandemic drove Clubhouse to a $4 billion valuation that never looked sustainable April 27, 2023, Ari Levy, CNBC

In January 2021, Andreessen's venture firm, Andreessen Horowitz, led an investment in the company at a reported $1 billion valuation, up from $100 million in mid-2020. Three months later, that number swelled to $4 billion, with Tiger Global and DST Global joining the party. As of mid-April of that year, downloads had reached 14.2 million, according to App Annie (now Data.ai), but growth had flattened before a revenue model was ever put in place.

By late 2021, the Covid boom was fading. Economies were reopening and the Federal Reserve was signaling that the extended stretch of rock-bottom interest rates would be coming to an end. Tech stocks peaked in November 2021, just as the last of a massive wave of high-valued IPOs hit the market. Share prices of stay-at-home beneficiaries like Zoom and Peloton got crushed.

The Clubhouse fad evaporated so quickly that Thursday's blog post, indicating that the company was laying off 50% its staff, seemed as if it should've come many months earlier. Davison told Bloomberg in late 2021 that we "grew way, way too fast" earlier in the year.

Wikipedia cite:
{{cite news | first = Ari | last = Levy | title = The pandemic drove Clubhouse to a $4 billion valuation that never looked sustainable | url = https://www.cnbc.com/2023/04/27/clubhouse-layoffs-app-reached-4-billion-valuation-during-pandemic.html | work = CNBC | date = April 27, 2023 | accessdate = November 7, 2023 }}