Clubhouse And The Gathering of Clones

Clubhouse And The Gathering of Clones

The social audio app Clubhouse is rumored to have raised a Series C funding round, valuing the company at about $4 billion. The startup which began life in 2020 is rocking the social media world, and now boasts of 10 million weekly active users. Yet, as LinkedIn, Facebook, Twitter, Spotify and others circle the voice social media ecosystem with clones, the question becomes: does Clubhouse have a future? Unlike Tiktok which created a huge niche within an existing order, souped and moated by the world’s best short video discovery algorithm, the moat in Clubhouse may not be very evident.

Audio-chat app Clubhouse closed a new Series C round of financing, the company said during its weekly town hall on Sunday, without disclosing the amount raised.

A source familiar with the matter confirmed to Reuters that the new financing would value the company at $4 billion.

The social media app said the new round of financing was led by Andrew Chen of venture capital firm Andreessen Horowitz with major investors like DST Global, Tiger Global and Elad Gil.

The biggest innovation in Clubhouse is that it has the first mover advantage. Yes, it began first on the audio social platform category. But I am not sure it has any top industry-shaping algorithm which new players with more auxiliary data cannot eclipse. 

So, at the end, Clubhouse may end up selling. If LinkedIn needed Microsoft to exist, you see the high order required to thrive in this age. LinkedIn does not need to be as good as Clubhouse on what Clubhouse offers. Most will just manage with it provided it keeps most things together in one place, saving us from having many apps installed! If that is the case, Clubhouse hits a growth ceiling quicker, and selling becomes inevitable. 

Yet, that sale may not happen as those who can afford to buy this company may be worried about how the US Congress will react after the challenging experiences with Facebook. Many today believe that Facebook acquisitions of WhatsApp and Instagram ought to have been blocked. So, under that climate, Clubhouse will have to go all the way, alone.

And with the high voltage searchlights the new Congress and US Presidency have on social media companies, potential buyers of Clubhouse may not be bold to close any deal. So, unless General Motors and Boeing (you get the idea) have interests, this firm may have to go it alone since the typicals (FB, Google, etc) will not like to annoy Congress with acquisition of a fledgling competitor.

This company has battles to fight: the clones are gathering daily. It must win those battles.


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