Marc Andreessen and other Silicon Valley venture capitalists are behind Clubhouse, an audio-based social media app that allows them to meet virtually. Still in beta, the invite-only app counts celebrity MC Hammer and activist DeRay Mckesson among its first members. According to sources, Andreessen Horowitz also beat out other venture firms to invest in Clubhouse, agreeing to infuse $10 million and pay $2 million to buy shares from the app’s existing shareholders. With the financing, Clubhouse is now valued at almost $100 million.
The New York Times reports that Andreessen’s investment in the app came on the heels of his published call urging investors that it is “Time to Build,” which Andreessen Horowitz partner Andrew Chen interpreted as including “new gaming cos, social apps, fitness and more!”
Lightspeed Venture Partners investor Jeremy Liew said his company, as well as “most of Silicon Valley,” has spoken to Clubhouse founders recently, adding that the app “got some early traction with VCs and no doubt that is why some firms leaned in.” Clubhouse was created by Silicon Valley entrepreneur Paul Davison and former Google engineer Rohan Seth.
Clubhouse currently has “just a few thousand” users, but many of them are “already addicted” with one reporting having spent 40+ hours a week on it. Users join pop-up audio chat rooms where they “are segmented into tiers determined by moderators.” NYT adds that, “users can join any chat room, see who is speaking or listening, click into a profile page and follow others … [with] some [saying] Clubhouse had brought back the spontaneity of real-life interactions.”
Digital marketing consultant Sonia Baschez said, “it’s like walking into a party where you know people are ready to mingle.” “You’re not forced to be part of the conversation the entire time on Clubhouse,” she said, reporting she spends three to five hours a day on the app. “You can just listen to other people talking about interesting subjects and jump in when you want.”
Susa Ventures investor Leo Polovets described it as “almost like a podcast with audience participation.”
At night, “Clubhouse is more like a rowdy dive bar,” with 30 to 50 people forming a room “where everyone is a host, moderator privileges are given freely, microphones are mostly unmuted and users swap their profile pictures in real time to memes and images related to the conversation.”
Participants dubbed themselves “Back of the Bus,” and the app already has its first influencer, Sheel Mohnot, founder of Better Tomorrow Ventures, a VC firm. Upstream co-founder Alex Taub noted that, “you don’t want to leave Clubhouse because you feel like when you leave, something crazy is going to happen.”
“Much of the engagement on Clubhouse today comes when a celebrity joins a room and followers get notified,” reports CNBC. “It could be MC Hammer, comedian Kevin Hart, actor Jared Leto (talking about washing fruit with soap) or hip-hop artist Fab 5 Freddy.”
“It’s either dead by July or it’s something big,” said Freestyle co-founder Josh Felser, who spends about an hour each day on the audio app. “We’re all locked away right now so it was a good time to launch it.”