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Instagram Reels are getting ads. The company announced today it’s launching ads in its short-form video platform and TikTok rival, Reels, to businesses and advertisers worldwide. The ads will be up to 30 seconds in length, like Reels themselves, and vertical in format, similar to ads found in Instagram Stories. Also like Reels, the new ads will loop, and people will be able to like, comment on, and save them, the same as other Reels videos.
The company had previously tested Reels ads in select markets earlier this year, including India, Brazil, Germany and Australia, then expanded those tests to Canada, France, the U.K. and the U.S. more recently. Early adopters of the new format have included brands like BMW, Nestlé (Nespresso), Louis Vuitton, Netflix, Uber and others.
Instagram tells us the ads will appear in most places users view Reels content, including on the Reels tab, Reels in Stories, Reels in Explore and Reels in your Instagram Feed, and will appear in between individual Reels posted by users. However, in order to be served a Reels ad, the user first needs to be in the immersive, full-screen Reels viewer.
Image Credits: Instagram
The company couldn’t say how often a user might see a Reels ad, noting that the number of ads a viewer may encounter will vary based on how they use Instagram. But the company is monitoring user sentiment around ads themselves, and the overall commerciality of Reels, it says.
Like Instagram’s other advertising products, Reels ads will launch with an auction-based model. But so far, Instagram is declining to share any sort of performance metrics around how those ads are doing, based on tests. Nor is it yet offering advertisers any creator tools or templates that could help them get started with Reels ads. Instead, Instagram likely assumes advertisers already have creative assets on hand or know how to make them, because of Reels ads’ similarities to other vertical video ads found elsewhere, including on Instagram’s competitors.
While vertical video has already shown the potential for driving consumers to e-commerce shopping sites, Instagram hasn’t yet taken advantage of Reels ads to drive users to its built-in Instagram Shops, though that seems like a natural next step as it attempts to tie the different parts of its app together.
But perhaps ahead of that step, Instagram needs to make Reels a more compelling destination — something other TikTok rivals, which now include both Snap and YouTube — have done by funding creator content directly. Instagram, meanwhile, had made offers to select TikTok stars directly.
The launch of Instagram Reels ads follows news of TikTok’s climbing ad prices. Bloomberg reported this month that TikTok is now asking for more than $1.4 million for a home page takeover ad in the U.S., as of the third quarter, which will jump to $1.8 million by Q4 and more than $2 million on a holiday. Though the company is still building its ads team and advertisers haven’t yet allocated large portions of their video budget to the app, that tends to follow user growth — and TikTok now has over 100 million monthly active users in the U.S.
Both apps, Instagram and TikTok, now have more than a billion monthly active users on a global basis, though Reels is only a part of the larger Instagram platform. For comparison, Instagram Stories is used by some 500 million users, which demonstrates Instagram’s ability to drive traffic to different areas of its app. Instagram declined to share how many users Reels has as of today.
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Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.
Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.
This week was a busy one. Facebook held its developer conference F8 which delivered a lot of app-related news across its platform. Now, WWDC is just days away. We also broke a few big app stories this week, including one about TikTok’s privacy policy and its newly added permission to collect biometric data on U.S. users, including “faceprints and voiceprints.” Twitter added a subscription service, and Tinder tested group video chat.
And in our downloads section, we have a treat for readers: a time-sensitive and exclusive invite code to get into one of the hottest new apps for sneakerheads: Sole Retriever.
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Image Credits: Apple
WWDC’s big keynote is kicking off next week on June 7 at 1 PM ET. The livestream page is here. While we may see new MacBook Pros, what software developers will care about are the forthcoming details about Apple’s latest OS releases and other new technologies. As to what they may include? Bloomberg reported that iOS 15 will introduce a way for users to set different notification preferences and automatic replies, based on their current status (driving, working, sleeping, etc.) and an updated Lock Screen where this menu of choices would be accessible. iMessage may be upgraded to be more social, to better compete with Messenger and WhatsApp. Meanwhile, iPadOS could be getting the App Library and an upgraded Home Screen with support for widgets. (And you can fill the screen with just widgets, if you choose.) Or who knows! Until it’s official, it’s all a maybe!
But one potentially interesting rumor to watch for would be a new privacy feature that would show users which apps were collecting data about them. This builds on Apple’s investments in App Tracking Transparency and could make it more difficult for shady SDKs to stay in business.
There will likely be some updates coming to other Apple’s own apps, Siri, watchOS and more. It’s going to be a packed week — stay tuned!
Ahead of WWDC, Apple also updated its report (conducted on its behalf via the Analysis Group) on App Store commerce. The company says the App Store facilitated $643 billion in billings and sales in 2020, up 24% from the $519 billion seen the year prior. It also noted that about 90% of the billings and sales facilitated by the App Store actually took place outside its walls, meaning Apple took no commission on those purchases. This is up from the 85% figure reported last year. The full report delves into other trends related to the pandemic’s impact, small and large businesses, and more. Apple initially commissioned the report to demonstrate how little business on the App Store is actually subject to App Store fees, but now it’s updated the report a year later. It’s interesting how much understanding Apple has about its App Store, especially when Tim Cook claimed to know so little about several crucial figures.
Image Credits: Apple
Apple also this week unveiled its 2021 Apple Design finalists. The awards honor apps and games that offer a combination of innovation, ingenuity and technical achievement — the latter which often means making great use of Apple technologies. The finalists span six categories: Inclusivity, Delight and Fun, Interaction, Social Impact, Visuals and Graphics, and Innovation.
Among the prospective winners are apps including snarky weather app Carrot Weather as well as the unique (Not Boring) Weather, short-form news service Brief, mental wellness app and Google Play award winner Loona, Editor’s Choice Genshin Impact, Snowman’s new kids app Pok Pok Playroom and summertime fun music app Poolside FM, and many others.
Google this week opened submissions for two of its annual developer programs: the Indie Games Accelerator and the Indie Games Festival. The programs are designed to help small games studios grow on Google Play. This year, the programs will include more eligible markets and will be fully digital experiences.
Google will restrict third-party apps from customizing the native Android Sharesheet in Android 12. Currently, the UI of the Sharesheet can differ from app to app, but XDA Developers reports it will become more iOS-like, by offering a consistent menu across apps.
Google is taking a cue from Apple by allowing users to opt out of personalization using the advertising ID in the Android Settings. Once users opt out, the advertising ID is disabled. The ID is a unique, user-resettable identifier provided by Google Play services. As part of a coming Google Play services update in late 2021, the advertising identifier will be removed when the user opts out of tracking, and any attempt to access the identifier will only return a string of zeros. Google says ad and analytics service partners will receive notifications about a user’s preferences to help them with compliance. The change will roll out in late 2021 and will impact apps running on Android 12 devices initially, with an expansion to devices that support Google Play in early 2022.
Image Credits: Wang Chenglu, president of Huawei Consumer Business Group’s software department
Two years after Huawei was put on a list of Chinese companies banned from doing business with U.S. organizations, it launched its proprietary operating system, HarmonyOS, for smartphones. The OS is designed to power phones, tablets and smart devices. Smartphone maker Meizu has already hinted it may adopt the new OS.
Image Credits: Facebook
Facebook’s flagship AR creation software, Spark AR, has already been used by more than 600,000 creators from over 190 countries to publish over 2 million AR effects. At Facebook’s F8 event this week, the company announced Multipeer API for video calls on Messenger, Instagram and Portal. The API will allow developers to create “shared AR” effects that apply to all the call participants — like a party hat that shows up on everyone’s heads for a birthday call, for instance.
Convenience store-style on-demand delivery startup JOKR launched in New York City to provide 15-minute or less delivery of items you might otherwise find in small stores and local delis. Except instead of dealing with stores, JOKR has its own strategically placed micro-hubs. The startup was founded by Ralf Wenzel, who previously founded Foodpanda, which later merged with Delivery Hero.
Image Credits: Walmart
Walmart is handing out over 740,000 new Samsung Galaxy XCover Pro smartphones (retail $499) to its employees, saying that “constant communication” is essential to its business. The phones will run Walmart’s proprietary Me@Walmart app, where employees clock in, adjust schedules, use the voice assistant “Ask Sam,” and communicate with others via push-to-talk. Employees will be allowed to use the phone for personal use after work hours, and Walmart will not have access to their personal data, the retailer says.
Image Credits: Kraken
Coinbase rival Kraken launched a mobile app in the U.S. that allows users to buy and sell more than 50 crypto tokens from their mobile phone. Kraken is the world’s fourth-largest digital currency exchange, in terms of trading volume.
Venmo now lets users hide their friend list for additional privacy. The change to the app came after BuzzFeed News found President Biden’s Venmo account using public friend lists. Digital rights groups had called the design a “security nightmare.”
Japan-based Line Corp. is launching its digital banking platform in Indonesia, which means it will now offering banking services in three of its biggest overseas markets: Indonesia, Thailand and Taiwan.
Coinbase Card, which allows users to spend their crypto while on the go, now works with Apple Pay and Google Pay. The card will offer up to 4% in crypto rewards for everyday purchases.
Chime has established itself as the No. 1 neobank in the U.S., according to eMarketer. The banking app will have 13.1 million U.S. accounts this year, up 30.7% from 2020. Current will have 4 million, double from the 2.1 million it had last year. Aspiration is in third place, with 3 million, followed by Varo, at 2.7 million.
Scoop: Tinder tested a group video chat feature ahead of parent company Match’s move into social discovery with its $1.73 billion acquisition of Seoul-based Hyperconnect. The feature was only tested briefly in New Zealand and then shut down, but may have served as a way to gain valuable data about younger users’ interest in social discovery apps and services as Match moves into that market which it says is double the size of the dating market.
Image Credits: Twitter
Twitter Blue officially launched. Will you pay for better Twitter? Twitter’s new premium subscription brings tools to organize your bookmarks, read threads in a clutter-free format and take advantage of an “Undo Tweet” feature — which is the closest thing Twitter will have to the long-requested “Edit” button. It also offers a few other perks, like custom app icons, colorful themes and subscription customer support. Unfortunately, the service is only live in Canada and Australia for the time being.
Twitter redesigned its mobile app to put its Clubhouse rival, Twitter Spaces, in the middle of its navigation bar. Initially, only around 500 people from the original Spaces beta test will first see the new Spaces discovery tab, but it will expand to more people over time. The tab will help people keep track of Spaces they want to listen to and manage notifications, among other things.
Twitter began rolling out Birdwatch fact checks inside tweets. Birdwatch is Twitter’s pilot program that aims to crowdsource fact-checking of tweets, as an alternative to relying on fact-checkers. The program’s goal will be to append more info to misinformation online in real time.

TikTok reamined the top non-game app worldwide in May 2021 by downloads. According to Sensor Tower, TikTok was No. 1 on both the App Store and Google Play with 80 million combined installs. Brazil accounted for 16% of those, and China 12%.
Facebook at its developer conference F8 also introduced Facebook Login Connect with Messenger. For businesses that have already integrated with Facebook Login, this allow users to log in to their app using their Facebook credentials and opt in to chat with businesses over Messenger, all in the Facebook Login flow. The tool is in closed beta.
Facebook also updated its Business Suite with a new feature that will allow developers to build “business apps,” which are tools made by third-party developers that work alongside the Business Suite. These “apps” could do things like bring in content from a catalog to their Facebook page or Instagram account. The platform already has 30 developers working on it and integrates with e-commerce platforms, like BigCommerce.
Image Credits: Facebook
WhatsApp reversed course and now says it won’t reduce the app’s functionality if users don’t agree to its new privacy policy. The rollout had led to a lot of backlash as it revealed the messaging app would begin sharing more info with Facebook.
As part of its F8-related announcements, WhatsApp said it would update its Business API to make it quicker for business to get started with its service. WhatsApp will make it faster to set up a business account (5 minutes instead of weeks), and will allow businesses to respond faster to inbound messages, as well as send messages to users who opted in. The business tool for customer care will allow up to 10 pre-written messages, among other updates.
Facebook CEO Mark Zuckerberg told popular news outlet/leaker WaBetaInfo that WhatsApp will add multi-device support for connecting up to four devices to one account. He also said WhatsApp will introduce a “view once” disappearing feature for photos and videos, and is working on an iPad app. The method of delivering this news is worth noting — WaBetaInfo is not a traditional news outlet, but more of an independent news portal of sorts. Zuckerberg has been taking Facebook news to non-traditional (and often far friendlier) channels as of late, including popping up in Clubhouse rooms and other independent outlets. Facebook clearly feels mainstream press has turned on it when they…[checks notes]…held Facebook accountable for its actions.
Facebook also announced the general availability of the Messenger API for Instagram. First announced last fall and rolling out in phases, the API offers a more efficient way for larger brands to handle a high volume of messages by allowing them to integrate Instagram messaging into the tools and applications they’re already using in-house to manage their Facebook conversations.
Community social network Nextdoor launched a new feature called Free Finds that helps its users unload their unwanted stuff on others in their neighborhood. Notably, the feature doesn’t require you to be a Nextdoor member to access the listings, but eventually, those users may convert.
Image Credits: Spotify
Spotify rolled out a sort of mid-year version of Wrapped with the launch of the new personalized experience, Only You. The feature offers insights about your music history in a sharable format, like your musical dinner party or audio birth chart, and other fun finds. Why now? Perhaps Spotify is heading off Apple Music news to come with a feature that reminds users it does personalization best?
Spotify also added Blend, a way to create a playlist with any other Spotify user. The company offers a similar feature for users on its Family and Duo plans, but this new tool doesn’t require users to be in the same household.
Apple tried to acquire livestreaming music platform Verzuz, which later sold to video social network Triller, Bloomberg reported. Apple didn’t engage in a bidding war and offered a lower price than what Triller paid, it said.
The Apple TV app launched on Android devices. Like Apple Music, Apple TV is a service that needs to work across platforms in order to compete with rivals. The Android app’s arrival followed the Apple TV app’s debut on Nvidia’s Shield TV, which means it’s now available across all major Android TV-based devices.
Amazon updated its Halo health app with a new feature called Movement Health, which will use computer vision and machine learning to asses users’ posture, mobility and stability and then suggest exercises to improve them.
Peloton slashed the pricing for its fitness app, normally $12.99/mo, for students, teachers, healthcare workers and military. Students can pay $6.99/mo while the others can pay $9.99/mo. Military members and their families can lock in that rate for life. The company is facing a PR crisis after recalling treadmills that injured 70 and led to one infant death.
Image Credits: App Annie
A TikTok trend where users prank people by spamming them on text has driven the app that makes that possible, Paste Keyboard, to the top of the App Store. Mashable noted the app’s rise, but couldn’t figure out why. Nor could App Annie. It’s kids, y’all. Honestly, the App Store needs a new “viral” chart at this point.
AirTag support is coming to Android. Apple announced some changes to AirTag, including the period of time they’ll make a sound when moved. The time will change from three times per day to a random time between 8-24 hours. Apple believes the shortening of the window will serve as a better deterrent against bad actors using AirTag to track someone. Alongside this announcement, Apple said it will later this year launch an Android application that will allow users to detect AirTag or other Find My network-enabled accessories that are separated from its owner and may be traveling with a user.
Firefox revamped its Mac and iOS app this week with a what it claims is a more distraction-free design, featuring streamlined toolbar and menus, expanded privacy protections, a new look for tabs, updated notifications and alerts, easier muting, and more.
Ring added “Request for Assistance posts” on its Neighbors app, claiming this will allow public safety agencies (e.g. police) to ask communities for help in investigations. The Request for Assistance posts can only be issued from verified public safety agency profiles, Ring says. Of course, this isn’t the only way police can acquire Ring videos, as the company has many police partnerships across the U.S. that let them acquire footage without a warrant.
Toyota added a data privacy portal to its apps. The feature is available in the Account Settings of the Toyota and Lexus apps and works with vehicles offering connected services that were built in the 2013 model year or later. It also allows consumers who own multiple Toyota or Lexus vehicles to customize privacy and data-sharing settings for each.
Gokada is launching its ride-hailing service in two more Nigerian cities as part of its super app plans. The company is merging its ride-hailing service with food delivery platform GShop. In the past year, Gokada crossed $100 million in annualized transaction value, and helped onboard 30,000 merchants.
Image Credits: Apptopia
The top reading and writing apps grew their IAP revenue 50% YoY in May 2021, Apptopia reported. This group includes apps for writing novels or comic books, or reading the works from others, like Webtoon, Wattpad, Dreame, GoodNovel, Webnovel, Tapas and Radish. As a grouping, these apps have also grown IAP revenue 15% over the past six months. Since January 2020, Webtoon and Dreame combined accounted for 56.3% of the grouping’s total IAP revenue.
Google, Facebook, WhatsApp, Telegram, LinkedIn and startups ShareChat and Koo have now either fully or partially complied with India’s IT rules that require them to appoint and share contact details of representatives tasked with compliance, nodal point of reference and grievance redressals to address on-ground concerns. Twitter, whose offices were raided by police in Delhi, has not yet complied.
EU will review TikTok’s Terms of Service following child safety complaints. Areas of concern include hidden marketing, aggressive advertising techniques targeted at children and contractual terms in the company’s policies that could be misleading or confusing for consumers.
The TikTok logo is seen on an iPhone 11 Pro max
Scoop: TikTok just gave itself permission to collect biometric data on U.S. users, including “faceprints and voiceprints.” A change to TikTok’s U.S. privacy policy on Wednesday introduced a new section that says the social video app “may collect biometric identifiers and biometric information” from its users’ content, including things like “faceprints and voiceprints.” Reached for comment, TikTok could not confirm what product developments necessitated the addition of biometric data to its list of disclosures about the information it automatically collects from users, but said it would ask for consent in the case such data collection practices began.
The biometric data collection details were introduced in the newly added section, “Image and Audio Information,” found under the heading of “Information we collect automatically” in the policy.
Alibaba’s UC Browser app has been found to be harvesting the private web activity of users across Android or iOS when incognito mode is turned on. The browser is the fourth largest in the world, with 500 million Android downloads alone. Before being banned in India over security concerns related to Chinese apps, it was also one of the most popular in India, as well.
Miami-based NUE Life Health raised $3.3 million for its telemedicine platform and app in the U.S., where it combines mental wellness solutions that employ psychedelic-assisted therapies with a graph database-driven app. The app was backed by investors who recently left SV for Miami, including Jack Abraham, Shervin Pishevar, Martin Varsavsky, Jon Oringer, James Bailey and Christina Getty.
Etsy acquired secondhand e-commerce startup Depop for more than $1.6 billion. Depop, which caters to a Gen Z crowd, saw 2020 gross merchandise sales and revenue of approximately $650 million and $70 million, respectively.
Social network platform Venn raised $60 million in Series B funding led by Group 11. The startup provides technology that allows building owners and other real estate partners and communities to provide social networking services to their tenants, with tools for organizing buy/sell groups, organizing community activities, connecting with neighbors and more.
Digital health management company Hello Heart raised $45 million Series C led by IVP. The company’s app is marketed by employers as part of their benefit programs and helps patients manage heart health and blood pressure, medications and more.
Personal finance app Truebill raised $17 million in Series C funding led by Accel, valuing the business at $500 million. The app helps consumers get better control over their finances by helping them cancel subscriptions, negotiate bills, view credit reports, budget, and access spending insights, among other things.
Newly launched stock trading app Lightyear disclosed it raised $1.5 million pre-seed funding in a round co-led by the new unnamed fund formed by Wise co-founder Taavet Hinrikus and Teleport co-founder Sten Tamkivi. The app was the fund’s first investment.
Istanbul-based grocery delivery app Getir raised $550 million in new funding, tripling its valuation to $7.5 billion. New investors include DisruptAD and Mubadala Funding Firm (both being arms of Abu Dhabi sovereign wealth funds) as well as Silicon Valley-based Silver Lake.
Image Credits: Sole Retriever
Sole Retriever is a newly launched app that aims to be a sneakerhead’s dream.
The app offers a one-stop shop for all things sneaker — including sneaker news, sneaker releases, sneaker raffles, a calendar of upcoming drops and more. The company says its goal is to democratize access to sneaker drops by making this info more accessible and convenient for consumers. Before its mobile launch, Sole Retriever had offered its service via the web only. Now it’s live on both iOS and Android.
Unique to the mobile experience is the ability to customize your alerts so you only hear about the raffles you want to know about — like those in the U.S., or only those that are in-store or online, for example. It also makes entering raffles easier with autofill features. Custom profiles that let you save the info for others who have agreed to let you enter their name and address to increase your chances of winning. And the app can save your logins for different retailers to make shopping easier.
Sole Retriever is currently only available as a waitlist, but TechCrunch readers can bypass the waitlist! Here’s how!
After downloading the app and logging in, when you reach the waitlist screen, you can redeem a special code — “TWIA” (in all caps!), which lets you bypass the entire waitlist and gain instant access to start your seven-day free trial for the app. The code is only valid for 24 hours after this post goes live so hit it quickly!
Image Credits: Apple
The Apple Developer app is not new. But it is the must-have download for the week ahead, as it will provide mobile developers with access to everything needed to navigate WWDC 21’s all-digital event. The app was updated this week with details about the agenda, sessions, pavilions, labs, coding and design challenges, and more. Developers can also sign up for labs inside the app and get notifications about their appointments. There are also new WWDC 21 iMessage stickers for some added fun.
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Our relationship with fashion has changed, and not just because of the pandemic. Months in lockdown means people are probably more aware of their fashion purchases and how they consume, given its been such a long time without socializing. But the oft-talked about “Clueless” wardrobe, which would allow women to both see into their collections, as well as share and potentially borrow from friends, has yet to go mainstream. Now a U.K. startup aims to change this.
The Little Black Door app, previously in closed beta, has just launched on the Apple iOS store here and on Android.
The app allows women to share the content of their wardrobes in an Instagram-like manner by creating collections (“Lookbooks”), as well as curate their private wardrobe for their own use, with a focus on premium and luxury fashion. Women, says LBD, can “see, style and share”, as well as resell and borrow clothes offline.
The Lookbook feature allows women to share wardrobes collections with friends or followers in a controlled way, a feature that lets users borrow from each other.
Co-founder Lexi Willetts tells me: “We’d simply gotten to a point where we didn’t know what fashion we owned, given that almost every other area of life allows this. Most fashion can be easily dash-boarded on our phones — we couldn’t understand why our wardrobe wasn’t! Equally the effort required to list an item on resale was also super hard.”
Willetts and co-founder Marina Pengilly came up with the app when they realized they could make as much as £30,000 a year reselling their luxury clothes and accessories online. LBD is going after four key trends: the rise of resale (Depop etc); rentals like Rent the Runway; AI in e-commerce; and re-receipts.
Users upload their wardrobe by taking a photo of an item. The app will then recognize the item using computer vision. Lookbooks showcases fashion collections; new and old also have an “I have this” button, allowing users to add items to their own wardrobes, or add as they buy automatically via links to retailers.
Another key feature allows users to see into their own wardrobes to see what they have, and, crucially, see how much they’ve spent, and own, in value.
Users can also create a Lookbook, not unlike on Pinterest, which can be shared with friends or a wider fashion community in a public or private group-controlled way. Lookbooks can be shared with a user’s network to allow them to see your style, or borrow the outfit in real life. As well as this, LBD itself also curates a feed of fashion/lifestyle news and surveys.
Willetts says partnerships with retailers and supplier deals for sales and fashion repairs are also in the offing.
LBD competes with the Save Your Wardrobe’ app.
But it is pushing the fact that it places a greater emphasis on sharing the wardrobe as well, also allowing people to borrow items With this focus on premium and luxury fashion this makes it a truly social wardrobe, says LBD.
The business model is likely to be a Premium version that unlocks extra features, affiliate revenues, advertising, and resale commissions.
Disclosure: Mike Butcher was an early, informal, adviser.
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F8 Refresh, Facebook’s annual developer conference with a new twist — it’s more pared down than in years past, and virtual — is going to be kicking off later today, and ahead of that Facebook is unveiling some news: all businesses can now use the Messenger API to interact with users on Instagram. The feature is opening first to all developers globally, with a phased approach for businesses:
Phase 1 will see Instagram accounts with follower counts of over 10,000 and under 100,000 connect to the API. It plans to expand that to accounts with followers numbering between 1,000 and 100,000 in July (phase 2), with remaining accounts coming online by Q3.
The feature was first announced as a closed beta in October with select businesses — 30 developers and 700 brands in all. Now, any brand or organization using Instagram to interact with customers can use it.
The key point with this tool is that this integration represents a significant step forward in how companies can leverage the wider Facebook platform.
In the past, a brand that wanted to interact with customers either needed to do so directly through Instagram, or via Facebook’s unified business inbox, which are limited how they can be used, especially by companies that might be handling large volumes of traffic, or keen to be able to link up those customer interactions with wider customer service databases.
The Messenger API, by contrast, can be integrated into any third-party application that a company or brand might be using to manage communication, whether it’s a social media management platform like Hootsuite or Sprinklr, or a CRM application that can bring in other kinds of customer data, for example warranty information or loyalty card numbers.
Facebook noted that one of the key takeaways from the closed beta was that brands and companies wanted better ways of managing communications from one place; and another was that many of them are making more investments in software to better manage their communications and workflows. So extending the Messenger API to Instagram was a feature that was long needed in that regard.
The move to expand the Messenger API to Instagram makes sense in a couple of different ways. For starters, Facebook has been turning up the volume for some time on how it leverages Instagram’s commercial potential, starting with advertising but expanding into areas like conversation between brands or businesses and users, and most recently, enhanced shopping features. Facebook also notes that 90% of Instagram users today follow at least one business, so creating a better route for managing those conversations is a logical move.
At the same time, Facebook has been working on ways of better linking up its various apps and platforms — which include Facebook itself, Messenger, WhatsApp, Instagram and Oculus, not just for users to interact across them but to help businesses leverage them in a more unified social strategy. Rolling out the Messenger API — created originally to help brands interact with bots and manage conversations on Messenger — to include support for Instagram fits into both of those bigger strategies.
And for those wondering why it’s being announced ahead of F8 Refresh? Perhaps it’s a hint of what is the social network’s bigger priorities for this year’s event: partnerships to enable more business to take place on the social networking giant’s platforms.
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If Instagram’s photo tagging feature was spun out into its own app, you’d have the viral sensation Poparazzi, now the No. 1 app on the App Store. The new social networking app, from the same folks behind TTYL and others, lets you create a social profile that only your friends can post photos to — in other words, making your friends your own “paparazzi.” To its credit, the new app has perfectly executed on a series of choices designed to fuel day-one growth — from its prelaunch TikTok hype cycle to drive App Store preorders to its postlaunch social buzz, including favorable tweets by its backers. But the app has also traded user privacy in some cases to amplify network effects in its bid for the Top Charts, which is a risky move in terms of its long-term staying power.
The company positions Poparazzi as a sort of anti-Instagram, rebelling against today’s social feeds filled with edited photos, too many selfies and “seemingly effortless perfection.” People’s real lives are made up of many unperfect moments that are worthy of being captured and shared, too, a company blog post explains.
This manifesto hits the right notes at the right time. User demand for less performative social media has been steadily growing for years — particularly as younger, Gen Z users wake up to the manipulations by tech giants. We’ve already seen a number of startups try to siphon users away from Instagram using similar rallying cries, including Minutiae, Vero, Dayflash, Oggl and, more recently, the once-buzzy Dispo and the under-the-radar Herd.
Even Facebook has woken up to consumer demand on this front, with its plan to roll out new features that allow Facebook and Instagram users to remove the Like counts from their posts and their feeds.
Poparazzi hasn’t necessarily innovated in terms of its core idea — after all, tagging users in photos has existed for years. In fact, it was one of the first viral effects introduced by Facebook in its earlier days.
Instead, Poparazzi hit the top of the charts by carefully executing on growth strategies that ensured a rocket ship-style launch.
@poparazziappcomment it! ##greenscreen ##poparazziapp ##positivity ##foryoupage♬ Milkshake – BBY Kodie
The company began gathering prelaunch buzz by driving demand via TikTok — a platform that’s already helped mint App Store hits like the mobile game High Heels. TikTok’s powers are still often underestimated, even though its potential to send apps up the Top Charts have successfully boosted downloads for a number of mobile businesses, including TikTok sister app CapCut and e-commerce app Shein, for example.
And Poparazzi didn’t just build demand on TikTok — it actually captured it by pointing users to its App Store preorders page via the link in its bio. By the time launch day rolled around, it had a gaggle of Gen Z users ready and willing to give Poparazzi a try.
The app launches with a clever onboarding screen that uses haptics to buzz and vibrate your phone while the intro video plays. This is unusual enough that users will talk and post about how cool it was — another potential means of generating organic growth through word-of-mouth.
After getting you riled up with excitement, Poparazzi eases you into its bigger data grab.
First, it signs up and authenticates users through a phone number. Despite Apple’s App Store policy, which requires it, there is no privacy-focused option to use “Sign In with Apple,” which allows users to protect their identity. That would have limited Poparazzi’s growth potential versus its phone number and address book access approach.
It then presents you with a screen where it asks for permission to access your Camera (an obvious necessity) and Contacts (wait, all of them?), and permission to send you Notifications. This is where things start to get more dicey. The app, like Clubhouse once did, demands a full address book upload. This is unnecessary in terms of an app’s usability, as there are plenty of other ways to add friends on social media — like by scanning each other’s QR code, typing in a username directly or performing a search.
But gaining access to someone’s full Contacts database lets Poparazzi skip having to build out features for the privacy-minded. It can simply match your stored phone numbers with those it has on file from user signups and create an instant friend graph.
As you complete each permission, Poparazzi rewards you with green checkmarks. In fact, even if you deny the permission being asked, the green check appears. This may confuse users as to whether they’ve accidently given the app access.
While you can “deny” the Address Book upload — a request met with a tsk tsk of a pop-up message — Poparazzi literally only works with friends, it warns you — you can’t avoid being found by other Poparazzi users who have your phone number stored in their phone.
When users sign up, the app matches their address book to the phone number it has on file and then — boom! — new users are instantly following the existing users. And if any other friends have signed up before you, they’ll be following you as soon as you log in the first time.
In other words, there’s no manual curation of a “friend graph” here. The expectation is that your address book is your friend graph, and Poparazzi is just duplicating it.
Of course, this isn’t always an accurate presentation of reality.
Many younger people, and particularly women, have the phone numbers of abusers, stalkers and exes stored in their phone’s Contacts. By doing so, they can leverage the phone’s built-in tools to block the unwanted calls and texts from that person. But because Poparazzi automatically matches people by phone number, abusers could gain immediate access to the user profiles of the people they’re trying to harass or hurt.
Sure, this is an edge case. But it’s a nontrivial one.
It’s a well-documented problem, too — and one that had plagued Clubhouse, which similarly required full address book uploads during its early growth phase. It’s a terrible strategy to become the norm, and one that does not appear to have created a lasting near-term lock-in for Clubhouse. It’s also not a new tactic. Mobile social network Path tried address book uploads nearly a decade ago and almost everyone at the time agreed this was not a good idea.
As carefully designed as Poparazzi is — (it’s even got a blue icon — a color that denotes trustworthiness!) — it’s likely the company intentionally chose the trade-off. It’s forgoing some aspects of user privacy and safety in favor of the network effects that come from having an instant friend graph.
The rest of the app then pushes you to grow that friend graph further and engage with other users. Your profile will remain bare unless you can convince someone to upload photos of you. A SnapKit integration lets you beg for photo tags over on Snapchat. And if you can’t get enough of your friends to tag you in photos, then you may find yourself drawn to the setting “Allow Pops from Everyone,” instead of just “People You Approve.”
There’s no world in which letting “everyone” upload photos to a social media profile doesn’t invite abuse at some point, but Poparazzi is clearly hedging its bets here. It likely knows it won’t have to deal with the fallout of these choices until further down the road — after it’s filled out its network with millions of disgruntled Instagram users, that is.
Dozens of other growth hacks are spread throughout the app, too, from multiple pushes to invite friends scattered throughout the app to a very Snapchatt-y “Top Poparazzi” section that will incentivize best friends to keep up their posting streaks.
It’s a clever bag of tricks. And though the app does not offer comments or followers counts, it isn’t being much of an “anti-Instagram” when it comes to chasing clout. The posts — which can turn into looping GIFs if you snap a few in a row — may be more “authentic” and unedited than those on Instagram; but Poparazzi users react to posts with a range of emojis and how many reactions a post receives is shown publicly.
For beta testers featured on the explore page, reactions can be in the hundreds or thousands — effectively establishing a bar for Pop influence.
Finally, users you follow have permission to post photos, but if you unfollow them — a sure sign that you no longer want them to be in your poparazzi squad — they can still post to your profile. As it turns out, your squad is managed under a separate setting under “Allow Pops From.” That could lead to trouble. At the very least, it would be nice to see the app asking users if they also want to remove the unfollowed account’s permission to post to your profile at the time of the unfollow.
Overall, the app can be fun — especially if you’re in the young, carefree demographic it caters to. Its friend-centric and ironically anti-glam stance is promising as well. But additional privacy controls and the ability to join the service in a way that offers far more granular control of your friend graph in order to boost anti-abuse protections would be welcome additions.
TechCrunch tried to reach Poparazzi’s team to gain their perspective on the app’s design and growth strategy, but did not hear back. (We understand they’re heads down for the time being.) We understand, per SignalFire’s Josh Constine and our own confirmation, that Floodgate has invested in the startup, as has former TechCrunch co-editor Alexia Bonatsos’ Dream Machine and Weekend Fund.
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Facebook this week will begin to publicly roll out the option to hide Likes on posts across both Facebook and Instagram, following earlier tests beginning in 2019. The project, which puts the decision about Likes in the hands of the company’s global user base, had been in development for years, but was deprioritized due to the COVID-19 pandemic and the response work required on Facebook’s part, the company says.
Originally, the idea to hide Like counts on Facebook’s social networks was focused on depressurizing the experience for users. Often, users faced anxiety and embarrassment around their posts if they didn’t receive enough Likes to be considered “popular.” This problem was particularly difficult for younger users who highly value what peers think of them — so much so that they would take down posts that didn’t receive enough Likes.
Like-chasing on Instagram, especially, also helped create an environment where people posted to gain clout and notoriety, which can be a less authentic experience. On Facebook, gaining Likes or other forms of engagement could also be associated with posting polarizing content that required a reaction.
As a result of this pressure to perform, some users grew hungry for a “Like-free” safer space, where they could engage with friends or the wider public without trying to earn these popularity points. That, in turn, gave rise to a new crop of social networking and photo-sharing apps such as Minutiae, Vero, Dayflash, Oggl and, now, newcomers like Dispo and newly viral Poparazzi.
Though Facebook and Instagram could have chosen to remove Likes entirely and take its social networks in a new direction, the company soon found that the metric was too deeply integrated into the product experience to be fully removed. One key issue was how the influencer community today trades on Likes as a form of currency that allows them to exchange their online popularity for brand deals and job opportunities. Removing Likes, then, is not necessarily an option for these users.
Instagram realized that if it made a decision for its users, it would anger one side or the other — even if the move in either direction didn’t really impact other core metrics, like app usage.
Image Credits: Instagram
“How many likes [users] got, or other people got — it turned out that it didn’t actually change nearly as much about the experience, in terms of how people felt or how much they use the experience, as we thought it would. But it did end up being pretty polarizing,” admitted Instagram head, Adam Mosseri. “Some people really liked it and some people really didn’t.”
“For those who liked it, it was mostly what we had hoped — which is that it depressurized the experience. And, for those who didn’t, they used Likes to get a sense for what was trending or was relevant on Instagram and on Facebook. And they were just super annoyed that we took it away,” he added. This latter group sometimes included smaller creators still working on establishing a presence across social media, though larger influencers were sometimes in favor of Like removals. (Mosseri name-checked Katy Perry as being pro Like removals, in fact.)
Ultimately, the company decided to split the difference. Instead of making a hard choice about the future of its online communities, it’s rolling out the “no Likes” option as a user-controlled setting on both platforms.
On Instagram, both content consumers and content producers can turn on or off Like and View counts on posts — which means you can choose to not see these metrics when scrolling your own Feed and you can choose whether to allow Likes to be viewed by others when you’re posting. These are configured as two different settings, which provides for more flexibility and control.
Image Credits: Instagram
On Facebook, meanwhile, users access the new setting from the “Settings & Privacy” area under News Feed Settings (or News Feed Preferences on desktop). From here, you’ll find an option to “Hide number of reactions” to turn this setting off for both your own posts and for posts from others in News Feed, groups and Pages.
The feature will be made available to both public and private profiles, Facebook tells us, and will include posts you’ve published previously.
Image Credits: Facebook
Instagram last month restarted its tests on this feature in order to work out any final bugs before making the new settings live for global users, and said a Facebook test would come soon. But it’s now forging ahead with making the feature available publicly. When asked why such a short test, Instagram told TechCrunch it had been testing various iterations on this experience since 2019, so it felt it had enough data to proceed with a global launch.
Mosseri also pushed back at the idea that a decision on Likes would have majorly impacted the network. While removal of Likes on Instagram had some impact on user behavior, he said, it was not enough to be concerning. In some groups, users posted more — signaling that they felt less pressure to perform, perhaps. But others engaged less, Mosseri said.
Image Credits: Facebook
“Often people say, ‘oh, this has a bunch of Likes. I’m gonna go check it out,’ ” the exec explained. “Then they read the comments, or go deeper, or swipe to the carousel. There’s been some small effects — some positive, some negative — but they’ve all been small,” he noted. Instagram also believes users may toggle on and off the feature at various times, based on how they’re feeling.
In addition, Mosseri pointed out, “there’s no rigorous research that suggests Likes are bad for people’s well-being” — a statement that pushes back over the growing concerns that a gamified social media space is bad for users’ mental health. Instead, he argued that Instagram is still a small part of people’s day, so how Likes function doesn’t affect people’s overall well-being.
“As big as we are, we have to be careful not to overestimate our influence,” Mosseri said.
He also dismissed some of the current research pointing to negative impacts of social media use as being overly reliant on methodologies that ask users to self-report their use, rather than measure it directly.
In other words, this is not a company that feels motivated to remove Likes entirely due to the negative mental health outcomes attributed to its popularity metrics.
It’s worth mentioning that another factor that could have come into play here is Instagram’s plan to make a version of its app available to children under the age of 13, as competitor TikTok did following its FTC settlement. In that case, hiding Likes by default — or perhaps adding a parental control option — would necessitate such a setting. Instagram tells TechCrunch that, while it’s too soon to know what it would do with a kids app, it will “definitely explore” a no Likes by default option.
Facebook and Instagram both told TechCrunch the feature will roll out starting on Wednesday but will reach global users over time. On Instagram, that may take a matter of days.
Facebook, meanwhile, says a small percentage of users will have the feature Wednesday — notified through an alert on News Feed — but it will reach Facebook’s global audience “over the next few weeks.”
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Pinterest is expanding further into the creator community with today’s launch of a video-first feature called “Idea Pins,” aimed at creators who want to tell their stories using video, music, creative editing tools and more. The feature feels a lot like Pinterest’s own take on TikTok, mixed with Stories, as the new Pins allow creators to record and edit creative videos with up to 20 pages of content, using tools like voiceover recording, background music, transitions and other interactive elements.
The company says Idea Pins evolved out of its tests with Story Pins, launched into beta in September 2020, after various stages of development beginning the year prior. At the time, Pinterest explained that Story Pins were different from the Stories you’d find on other social networks, like Snapchat or Instagram, because they focused on what people were doing — like trying new ideas or new products, not giving you snapshots of a creator’s personal life.
Another notable differentiator was that Story Pins weren’t ephemeral. That is, they didn’t disappear after a certain amount of time, but rather could be surfaced through search and other discovery mechanisms.
Over the past eight months since their debut, Pinterest has worked with Story Pin creators on the experience. That’s led to the new concept of the Idea Pin — essentially a rebranded Story Pin, which now offers a broader suite of editing tools than what was previously available.
Video is a key element in Idea Pins, as the Pins target the increased consumer demand for short-form video content of a creative nature — like what’s being delivered through TikTok, Instagram Reels, YouTube Shorts and elsewhere. The videos in the Pins can be up to 60 seconds on iOS, Android and web for each page, with up to 20 total pages per Pin.
Image Credits: Pinterest
Creators can edit their videos by adding their own voiceover or using a “ghost mode” transition tool to better showcase their before-and-afters by overlaying one part of a video on another. And they can save drafts of their work in progress.
But Idea Pins still include a number of features common to Stories, like adding stickers or tagging other creators with an @username, for instance. Pinterest says it will start with over 100 stickers featuring hand-drawn illustrations focused on top categories and behaviors it expects to see, like food-themed illustrations, stickers for before-and-afters, seasonal moments, and more.
Pinterest is also working with the royalty-free music database Epidemic Sound to offer a catalog of free tracks for use in Idea Pins.
And because many creators will use Idea Pins to inspire people to try a recipe or project of some sort, they can include “detail pages” where viewers can find the ingredient list or instructions, which is handy.
Image Credits: Pinterest
Pins are shared to Pinterest, where the company says they help the creator build an audience by being distributed in several places across its platform, including in some markets, by locating Pins for creators you follow right at the top of the home page.
Creators can also apply topic tags when publishing to ensure they’re surfaced when people are seeking that sort of content. Each Idea Pin can have up to 10 topic tags, which help to distribute the content in a targeted way to users via the home feed and search, the company says.
While Pins can help creators build an audience on Pinterest, they can use Idea Pins to grow their audience on other platforms, too. The company says it will offer export options that let people share their Pins across the web and social media. To do so, they download their Pin as a video, which includes a Pinterest watermark and profile name — a trick learned from TikTok. This can then be reshared elsewhere.
Image Credits: Pinterest
Pinterest users, meanwhile, can save Idea Pins like any other Pin on the platform.
“We believe the best inspiration comes from people who are fueled by their passions and want to bring positivity and creativity into the world,” said Pinterest co-founder and Chief Design and Creative Officer Evan Sharp, in a statement about the launch. “On Pinterest, anyone can inspire. From creators to hobbyists to publishers, Pinterest is a place where anyone can publish great ideas and discover inspiring content. We have creators with extraordinary ideas on Pinterest, and with Idea Pins, creators are empowered to share their passions and inspire their audiences,” he added.
The new Idea Pin format is rolling out today to all creators (users with a business account) in the U.S., U.K., Australia, Canada, France, Germany, Austria and Switzerland.
Image Credits: Pinterest
Pinterest says, during tests, it found that Idea Pins were more engaging than standard Pins, with 9x the average comment rate. The number of Idea Pins (previously known as Story Pins) has also grown by 4x since January, as more creators adopted the format.
To help creators track how well Pins are performing, Pinterest is expanding its Analytics feature to include a new followers and profile-visits-driven metric to show creators how their Idea Pins have driven deeper engagement with their account.
The company says the next step is to make Idea Pins more shoppable, which it’s doing now with tests of product tagging underway.
Pinterest has been increasing its investment in the creator community in recent months, with the launch of its first-ever Creator Fund last month, and this month’s test of livestreamed events with 21 creators. It’s also now testing creator and brand collaborations with a select number of creators, including Domonique Panton, Peter Som and GrossyPelosi, it says.
Image Credits: Pinterest
While Idea Pins seem like a natural pivot from Pinterest’s founding as an inspiration and idea board, it will face serious competition when it comes to wooing the professional creator community to its platform. Other Big Tech companies are outspending Pinterest, whose new Creator Fund of $500,000 falls short of the $1 million per day Snap paid creators or the $100 million fund for YouTube Shorts creators, TikTok’s $200 million fund or the deals Instagram has been making to lure Reels creators. These platforms, as well as a host of startups, are also giving creators a way to directly monetize their efforts through features like tips, donations, subscriptions and more.
What Pinterest may have in its favor, though, is its reach. The company claims 475 million users, which makes it a destination some creators may not want to overlook in their bid for growth, and later, e-commerce.
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YouTube is giving its TikTok competitor, YouTube Shorts, an injection of cash to help it better compete with rivals. The company today introduced the YouTube Shorts Fund, a $100 million fund that will pay YouTube Shorts creators for their most viewed and most engaging content over the course of 2021 and 2022. Creators can’t apply for the fund to help with content production, however. Instead, YouTube will reach out to creators each month whose videos exceeded certain milestones to reward them for their contributions.
The company expects to dole out money to “thousands” of creators every month, it says. And these creators don’t need to be in the YouTube Partner Program to qualify — anyone is eligible to receive rewards by creating original content for YouTube Shorts.
YouTube declined to share more specific details about the fund’s operations at this time, including how creators will be vetted or what specific thresholds for receiving payments YouTube has in mind. It also wouldn’t offer details as to whether YouTube creators could receive multiple payments in the same pay period if they had several videos that would qualify, or any other details.
And while the company stressed that only “original” content would gain rewards, it didn’t clarify how it will go about checking to ensure the content isn’t already uploaded on another platform, like Reels, Snapchat or TikTok.
Image Credits: YouTube
Instead, YouTube said that more details about the payments and qualifications would be available closer to the fund’s launch, which is expected sometime in the next few months. It pointed out also that it has paid out over $30 billion to creators, artists and media companies over the last three years, and it expects the new fund will help it to build a long-term monetization model for Shorts on YouTube going forward.
YouTube isn’t the only platform to take on the threat of TikTok by throwing cash at the problem.
Snapchat has been paying $1 million per day to creators for their top-performing videos on Spotlight, its own TikTok clone, minting several millionaires in the process. Facebook-owned Instagram, meanwhile, made lucrative offers to top TikTok stars to use its new service, Reels, The WSJ reported last year.
Despite the size of these efforts, TikTok’s own Creator Fund remains a competitive force. It announced its fund would grow to over $1 billion in the U.S. in the next three years and would be more than double that on a global basis. This March, it also added another requirement to receiving the fund’s payments, including having at least 100K authentic views in the last 30 days — a signal that it’s setting the bar even higher, given its current success.
Alongside the debut of YouTube’s Shorts Fund, the company also noted it’s expanding its Shorts player feature across more places on YouTube to help viewers discover this short-form video content, will begin testing ads for Shorts and will be rolling out the new “remix audio” feature to all Shorts creators.
Image Credits: YouTube
This somewhat controversial feature allows Shorts creators to sample sounds from other YouTube videos for use in their Shorts, instead of only using song clips or original audio. Some YouTube creators were surprised to find the feature was opt-out by default — meaning their content could be used on YouTube Shorts unless they took the time to turn this setting off or removed their video from YouTube.
Since its launch, YouTube has also rolled out other features to Shorts, including support for captions, the ability to record up to 60 seconds with the Shorts camera, the ability to add clips from your phone’s gallery to your recordings made with the Shorts camera and the ability use basic filters to color correct videos. YouTube says more effects will arrive in the future.
But even as YouTube tries to catch up with TikTok on feature sets, TikTok has been expanding its own effects lineup and becoming more YouTube-like by supporting longer videos. Some TikTok creators, for example, have recently been given the ability to record videos three minutes in length, instead of just 60 seconds.
YouTube says the new fund will roll out in the coming months and it will listen to the feedback from the creator community to develop a long-term program designed for YouTube Shorts.
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Instagram is making its video Stories and Reels more accessible with the launch of a new “captions sticker” that will allow users to watch without having the sound on. The addition will not only make it easier for users who are hard of hearing or deaf to engage with video content, it also offers a way for users to watch videos when they’re somewhere they don’t want to have their sound on — and either don’t want to wear or don’t have access to headphones or earbuds.
To use the feature, creators will first record a new video using the Stories or Reels Camera in the Instagram app, or select a video to upload from their phone’s gallery. Then, you’ll open the sticker tray and look for the new “Captions” sticker, which will convert your speech to text. You also can edit the style, position of the caption and the text and color so it matches your content. When you post, the captions will appear alongside your video for everyone to see.
At launch, the feature is only available in English and in English-speaking countries, but Instagram plans to roll it out to other countries and languages soon, it says. It’s also rolling out the captions sticker first to Stories and will then begin testing it in Reels, with a broader launch to follow.
The captions sticker had been spotted last year while in development, alongside other potential new additions, like a Collab sticker, Link sticker, Reshare sticker and others. Instagram parent Facebook also appears to have a captions sticker of its own in development. The sticker then began testing earlier this spring with some number of Instagram users.
The addition comes only weeks after TikTok announced its own captions feature, which it calls auto captions. The two products are somewhat different, however. Auto captions automatically translate the speech from a TikTok video in either American English and Japanese, to start, but the text itself isn’t customizable and can be turned on or off by the viewer from the app’s share panel. It also hasn’t yet been broadly adopted and many TikTok creators tend to still use captions they create themselves or via third-party apps.
Instagram notes it had previously launched support for captions across Threads and IGTV, but its expansion to Stories and Reels will make more of an impact, given that Instagram Stories alone is used by more than 500 million people every day.
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Nearly exactly one month ago, digital real estate platform Loft announced it had closed on $425 million in Series D funding led by New York-based D1 Capital Partners. The round included participation from a mix of new and existing investors such as DST, Tiger Global, Andreessen Horowitz, Fifth Wall and QED, among many others.
At the time, Loft was valued at $2.2 billion, a huge jump from its being just near unicorn territory in January 2020. The round marked one of the largest ever for a Brazilian startup.
Now, today, São Paulo-based Loft has announced an extension to that round with the closing of $100 million in additional funding that values the company at $2.9 billion. This means that the 3-year-old startup has increased its valuation by $700 million in a matter of weeks.
Baillie Gifford led the Series D-2 round, which also included participation from Tarsadia, Flight Deck, Caffeinated and others. Individuals also put money in the extension, including the founders of Better (Zach Frenkel), GoPuff, Instacart, Kavak and Sweetgreen.
Loft has seen great success in its efforts to serve as a “one-stop shop” for Brazilians to help them manage the home buying and selling process.
Image Credits: Loft
In 2020, Loft saw the number of listings on its site increase “10 to 15 times,” according to co-founder and co-CEO Mate Pencz. Today, the company actively maintains more than 13,000 property listings in approximately 130 regions across São Paulo and Rio de Janeiro, partnering with more than 30,000 brokers. Not only are more people open to transacting digitally, more people are looking to buy versus rent in the country.
“We did more than 6x YoY growth with many thousands of transactions over the course of 2020,” Pencz told TechCrunch at the time of the company’s last raise. “We’re now growing into the many tens of thousands, and soon hundreds of thousands, of active listings.”
The decision to raise more capital so soon was due to a variety of factors. For one, Loft has received “overwhelming investor interest” even after “a very, very oversubscribed main round,” Pencz said.
“We have seen a continued acceleration in our market share growth, especially in São Paulo and Rio de Janeiro, the two markets we currently operate in,” he added. “We saw an opportunity to grow even faster with additional capital.”
Pencz also pointed out that Baillie Gifford has relatively large minimum check size requirements, which led to the extension being conducted at a higher price and increased the total round size “by quite a bit to be able to accommodate them.”
While the company was less forthcoming about its financials as of late, it told me last year that it had notched “over $150 million in annualized revenues in its first full year of operation” via more than 1,000 transactions.
The company’s revenues and GMV (gross merchandise value) “increased significantly” in 2020, according to Pencz, who declined to provide more specifics. He did say those figures are “multiples higher from where they were,” and that Loft has “a very clear horizon to profitability.”
Pencz and Florian Hagenbuch founded Loft in early 2018 and today serve as its co-CEOs. The aim of the platform, in the company’s words, is “bringing Latin American real estate into the e-commerce age by developing online alternatives to analogue legacy processes and leveraging data to create transparency in highly opaque markets.” The U.S. real estate tech company with the closest model to Loft’s is probably Zillow, according to Pencz.
In the United States, prospective buyers and sellers have the benefit of MLSs, which in the words of the National Association of Realtors, are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property. Loft itself spent years and many dollars in creating its own such databases for the Brazilian market. Besides helping people buy and sell homes, it offers services around insurance, renovations and rentals.
In 2020, Loft also entered the mortgage business by acquiring one of the largest mortgage brokerage businesses in Brazil. The startup now ranks among the top-three mortgage originators in the country, according to Pencz. When it comes to helping people apply for mortgages, he likened Loft to U.S.-based Better.com.
This latest financing brings Loft’s total funding raised to an impressive $800 million. Other backers include Brazil’s Canary and a group of high-profile angel investors such as Max Levchin of Affirm and PayPal, Palantir co-founder Joe Lonsdale, Instagram co-founder Mike Krieger and David Vélez, CEO and founder of Brazilian fintech Nubank. In addition, Loft has also raised more than $100 million in debt financing through a series of publicly listed real estate funds.
Loft plans to use its new capital in part to expand across Brazil and eventually in Latin America and beyond. The company is also planning to explore more M&A opportunities.
This article was updated post-publication to reflect accurate investor information.
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