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Andreessen Horowitz leads yet another round in Clubhouse

April 19, 2021, 2:51 PM UTC

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Confirming earlier reports, audio-only startup Clubhouse revealed that it had raised yet another round of funding led by Andrew Chen at Andreessen Horowitz over the weekend.

While the buzzy social media startup did not disclose how much was raised, the Information reports that Clubhouse reached a $4 billion valuation after talks of a potential tie-up with Twitter stalled. Including investors such as DST Global, Tiger Global, and Elad Gil, the Series C round represents the third tranche of funding led by a16z.

The multiple rounds of funding into the app signals the significant belief a16z has in the company and its ability to build out a stronghold in the live-audio space—even as larger social media players look to copy its model. The app’s early runaway growth, meanwhile, appears to have shown signs of slowing down in recent weeks

Whether Clubhouse can battle the competitors and justify its $4 billion valuation is a hotly debated question. Some of the early numbers around its downloads from third-party data providers seem a bit jumbled. But regardless whether Clubhouse becomes an example of enormous success or unimaginable folly, its rapid ascent will certainly be one that will be referenced for a long time to come in startup lore.  

For now, the new funding will give the startup more ammo to battle its copycats. In the blog post announcing the raise, Clubhouse hinted at other areas where it could potentially spend its new capital, beyond developing its creator ecosystem and monetization.

“While we’ve quadrupled the size of our team this year…there is so much more to do as we work to bring Clubhouse to more people around the world,” the post read. “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.”

WAIT WHAT: Luckin Coffee, which fell from grace last year after an internal investigation discovered enormous fraud in which the company exaggerated its sales, has secured about $250 million from Chinese private equity investors Centurium Capital and Joy Capital. After an investigation that elicited comparisons of Enron, the coffee chain ended up declaring bankruptcy. But now, the new capital is being used largely to restructure the business “and fulfill its obligations under its recently announced settlement with the U.S. Securities and Exchange Commission.” Some $240 million in the form of senior convertible preferred shares come from Centurium, while the other $10 million in the form of senior preferred shares will be provided by Joy.

Lucinda Shen
Twitter: @shenlucinda


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