Fully Vested

Pronounced G as in Gif

Episode Summary

After an update about 3,000 newly announced layoffs at Uber we discuss Facebook’s acquisition of GIPHY for $400M and Andreesen Horowitz’s investment in the hotly sought after Clubhouse round.

Episode Notes

General

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Notes

Facebook Buys Giphy

• On Friday, Axios broke the news that Facebook was going to acquire popular Gif-sharing and search platform Giphy, reportedly for $400 million. Giphy is going to retain its branding and will have its functionality wrapped into Instagram.
• Giphy had raised just north of $150 million in equity funding. Its last reported private market valuation was $600 million, which Giphy earned in its $72 million Series D round from October 31, 2016. Giphy's later-stage investors may have taken a haircut on their shares, and the liquidation preference stack of Giphy is not public knowledge. In other words, it's likely that common shareholders walked away with something, but it's unclear how much.
• There's speculation that Facebook's decision was motivated by the company's insatiable hunger for user data, as folks like Owen Williams of OneZero and Fabrizio Bulleri of Reclaim The Net point out.
• This is reminiscent of Facebook's acquisition of VPN service Onavo, which the company reportedly used as a way to track up-and-coming competitors. Facebook shut down Onavo, which TechCrunch characterized as "its spyware VPN app," in February 2019.
• It's unclear the extent to which Giphy will be able to access user data on the individual level. Others have pointed out that many large services which include Giphy integrations serve content and requests through proxies. This may not let Facebook know what individual users are searching for, but may provide aggregate activity insights to Facebook over time.

Andreessen Horowitz backs the hottest new social app on the block

• Listeners who don't spend lots of time on VC Twitter may not have heard of Clubhouse, a "spontaneous" voice-driven social networking application developed by successful founder Paul Davidson.
• In April 2020, for TechCrunch, Josh Constine wrote about Clubhouse and a wash of related, new social networking apps that have recently sprung up. It's interesting that there's so much activity in the social networking space all of a sudden, and that the platforms are incredibly diverse in their interaction models.
• Alex Konrad reported in Forbes that Andreessen Horowitz led a seed round in Clubhouse which valued the startup at $100 million. The deal involved $10 million in primary equity backing, plus $2 million in a secondary sale of company shares, presumably netting founder Paul Davidson a tidy little payday. The application had less than 5,000 users at the time of reporting.

About The Co-Hosts

• Jason D. Rowley is a researcher and writer at Golden.com. He volunteers with startup outreach for the open source community,and sends occasional newsletters from Rowley.Report.
• Graham C. Peck is a Venture Partner with Cultivation Capital and additionally helps companies build technology development teams in partnership with Brightgrove and other technology development organizations.