Audio-based social app Clubhouse raises funding from Andreessen Horowitz

Audio-based social app Clubhouse said today it has raised new funding from the venture firm Andreessen Horowitz to help the startup scale up by hiring more people and investing in creators.

The amount of the Series B round for the company, formally named Alpha Exploration Co., was not disclosed. The Information reported Friday that Clubhouse had been in discussions before the round on a valuation of $1 billion but exactly how much it raised is a guess. Clubhouse had raised $12 million in a Series A round on a $100 million valuation last May.

Founded in March 2020, Clubhouse is an audio-based social app that allows users to join group chats spontaneously. Finding a simple explanation from the company, which is currently invite-only and only available on iOS, is somewhat difficult because it doesn’t bother to explain its service on its webpage.

On its Apple App Store page, it describes itself as a “space for casual, drop-in audio conversations — with friends and other interesting people around the world” that allows users to “go online anytime to chat with the people you follow, or hop in as a listener and hear what others are talking about.”

In a blog post announcing the funding, the company said the goal “was to build a social experience that felt more human — where instead of posting, you could gather with other people and talk… to create something where you could close the app at the end of the session feeling better than you did when you opened it, because you had deepened friendships, met new people and learned.”

There’s significant talk about the diversity in the service, or lack thereof, even putting aside it’s iOS only. There’s a strong emphasis on elites, including “musicians, scientists, creators, athletes, comedians, parents, entrepreneurs, stock traders, non-profit leaders, authors, artists” and others. Diversity and inclusion also in this case involves “important and nuanced conversations on topics of social justice reform, BLM and anti-racism.”

The general theory does sound reasonable. Audio chat groups are a sort of 21st century take on various Yahoo Groups that used to offer a similar service in the 1990s. But exactly how popular it can grow outside of the elite audience it’s courting is another matter.

Audio conversations take time to do, and although it offers something different, there’s a reason audio hasn’t replaced text as a medium of discussion between groups of people before at scale: Text doesn’t require live interaction. Maybe Clubhouse has found a way to overcome that.

Image: Clubhouse

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