Clubhouse has grown significantly in its one year of existence and recently it has conducted a new successful funding round.
Clubhouse, an audio-chat-based social media platform, closed a Series C round of funding recently. Clubhouse announced the finish of the hushed financing round during a town hall meeting on Saturday. The funding came from several prominent investors like DST Global, Tiger Global, and Elad Gil, and the round was led by Andrew Chen, from Andreessen Horowitz, a venture capital company.
Neither Clubhouse nor Andreessen Horowitz would disclose the total amount raised. However, a source close to the financing has placed the company’s new valuation at $4 billion, reminiscent of the same amount Twitter once offered to buy Clubhouse.
Clubhouse has grown significantly in its one year of existence. The invite-only, audio-based service has drawn millions of active users, about 10 million a week, including famous figures like Elon Musk and Lakeith Stanfield. The San Francisco-based company, whose iPhone app allows users to participate in audio-only chatrooms of up to 5000 participants discussing various topics, saw an increase in popularity during the coronavirus pandemic period when lockdowns were enforced.
Clubhouse faces more significant challenges in 2021; however, already several substantial social media and tech names are competing with its audio-chat model, Twitter CEO Jack Dorsey announced a similar audio chat service called Spaces just last month, and companies like Spotify, Facebook, Slack, Reddit, LinkedIn, Telegram and Discord are already planning their rollouts of similar products.
Several notable voices have stated, however, that Clubhouse’s spectacular success is only transient. Social media analysts like Matt Navarra and Timothy Armoo have noted the lack of relevant discussions and content in rooms as one of the most glaring problems Clubhouse is facing.
Other complaints involved the proliferation of “growth hackers” and social media managers, who make the platform unpleasant with derivative content and excessive scammers and spammers. The allure of being able to eavesdrop on exciting conversations had also dissipated, as all the exciting people are no longer on the platform ever since the lockdown restrictions have been relaxed.
Clubhouse founders Paul Davidson and Rohan Seth have unveiled solutions to these problems to maintain their user numbers. These include a partnership with Stripe that introduces a monetization feature, allowing creators to receive funds from users, and a creator acceleration program. These features aim to boost original content creation.
The platform has shown immense promise since its inception. Despite the several criticisms, proponents of the app remind people that the app is still in its nascent stages and still has much growth to do, which undoubtedly shall be aided by the recent funding the Clubhouse company has received.
The illustrations were provided by Depositphotos.com
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