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Inside GitLab’s IPO filing
While the technology and business world worked towards the weekend, developer operations (DevOps) firm GitLab filed to go public. Before we get into our time off, we need to pause, digest the company’s S-1 filing, and come to some early conclusions.
GitLab competes with GitHub, which Microsoft purchased for $7.5 billion back in 2018.
The company is notable for its long-held, remote-first stance, and for being more public with its metrics than most unicorns — for some time, GitLab had a November 18, 2020 IPO target in its public plans, to pick an example. We also knew when it crossed the $100 million recurring revenue threshold.
Considering GitLab’s more recent results, a narrowing operating loss in the last two quarters is good news for the company.
The company’s IPO has therefore been long expected. In its last primary transaction, GitLab raised $286 million at a post-money valuation of $2.75 billion, per Pitchbook data. The same information source also notes that GitLab executed a secondary transaction earlier this year worth $195 million, which gave the company a $6 billion valuation.
Let’s parse GitLab’s growth rate, its final pre-IPO scale, its SaaS metrics, and then ask if we think it can surpass its most recent private-market price. Sound good? Let’s rock.
The GitLab S-1
GitLab intends to list on the Nasdaq under the symbol “GTLB.” Its IPO filing lists a placeholder $100 million raise estimate, though that figure will change when the company sets an initial price range for its shares. Its fiscal year ends January 31, meaning that its quarters are offset from traditional calendar periods by a single month.
Let’s start with the big numbers.
In its fiscal year ended January 2020, GitLab posted revenues of $81.2 million, gross profit of $71.9 million, an operating loss of $128.4 million, and a modestly greater net loss of $130.7 million.
And in the year ended January 31, 2021, GitLab’s revenue rose roughly 87% to $152.2 million from a year earlier. The company’s gross profit rose around 86% to $133.7 million, and operating loss widened nearly 67% to $213.9 million. Its net loss totaled $192.2 million.
This paints a picture of a SaaS company growing quickly at scale, with essentially flat gross margins (88%). Growth has not been inexpensive either — GitLab spent more on sales and marketing than it generated in gross profit in the past two fiscal years.
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The value of software revenue may have finally stopped rising
Startups are raising record sums around the world, thanks to several contributing factors. As The Exchange explored yesterday, historically low interest rates have helped venture capitalists raise more capital than ever, to pick an example.
Low rates have helped startups in another manner: As yields fell for certain assets, investors chased returns by betting on growth. And in recent years, the investing classes turned their attention to public software companies, bidding up the value of their revenue to record highs.
This raised the worth of startups in general terms, and private tech companies’ comps enjoyed a steady, upward climb in the value of their revenues. If the value of a dollar of SaaS revenue was worth $1 one year and $2 the next, the repricing was good for private companies even if we were tracking the metrics from the perspective of public companies.
The free ride could be ending.
The Exchange explores startups, markets and money.
Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
I’ve held back from covering the value of software (SaaS, largely) revenues for a few months after spending a bit too much time on it in preceding quarters — when VCs begin to point out that you could just swap out numbers quarter to quarter and write the same post, it’s time for a break. But the value of software revenues posted a simply incredible run, and I can’t say “no” to a chart.
The pace at which software revenues were repriced upwards in the last few years is simply astounding. Per the Bessemer Cloud Index, back in 2016, the median revenue multiple for public SaaS companies was around 5x. When 2018 began, median SaaS multiples had expanded to around 7x.
That’s a 40% climb in pricing, but it proved to be just a foretaste of the feast to come.
By the end of 2019, the median figure had appreciated to around the 9x mark. And today it has shot to just under 18x. That is why software companies have been able to raise so much money, earlier, and in larger chunks. Every dollar of recurring revenue they sold was worth $5 in market cap in mid-2016. At the end of 2019, that same dollar of revenue was worth $9. And today, for the median public software company, it’s valued at around $18.
There are nuances to the data, but we care less about exacting definitions than the directional change it describes: The median value of SaaS revenues more than tripled from 2016 to 2021. That’s an insane amount of growth.
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Confluent CEO Jay Kreps is coming to TC Sessions: SaaS for a fireside chat
As companies process ever-increasing amounts of data, moving it in real time is a huge challenge for organizations. Confluent is a streaming data platform built on top of the open source Apache Kafka project that’s been designed to process massive numbers of events. To discuss this, and more, Confluent CEO and co-founder Jay Kreps will be joining us at TC Sessions: SaaS on Oct 27th for a fireside chat.
Data is a big part of the story we are telling at the SaaS event, as it has such a critical role in every business. Kreps has said in the past the data streams are at the core of every business, from sales to orders to customer experiences. As he wrote in a company blog post announcing the company’s $250 million Series E in April 2020, Confluent is working to process all of this data in real time — and that was a big reason why investors were willing to pour so much money into the company.
“The reason is simple: though new data technologies come and go, event streaming is emerging as a major new category that is on a path to be as important and foundational in the architecture of a modern digital company as databases have been,” Kreps wrote at the time.
The company’s streaming data platform takes a multi-faceted approach to streaming and builds on the open source Kafka project. While anyone can download and use Kafka, as with many open source projects, companies may lack the resources or expertise to deal with the raw open source code. Many a startup have been built on open source to help simplify whatever the project does, and Confluent and Kafka are no different.
Kreps told us in 2017 that companies using Kafka as a core technology include Netflix, Uber, Cisco and Goldman Sachs. But those companies have the resources to manage complex software like this. Mere mortal companies can pay Confluent to access a managed cloud version or they can manage it themselves and install it in the cloud infrastructure provider of choice.
The project was actually born at LinkedIn in 2011 when their engineers were tasked with building a tool to process the enormous number of events flowing through the platform. The company eventually open sourced the technology it had created and Apache Kafka was born.
Confluent launched in 2014 and raised over $450 million along the way. In its last private round in April 2020, the company scored a $4.5 billion valuation on a $250 million investment. As of today, it has a market cap of over $17 billion.
In addition to our discussion with Kreps, the conference will also include Google’s Javier Soltero, Amplitude’s Olivia Rose, as well as investors Kobie Fuller and Casey Aylward, among others. We hope you’ll join us. It’s going to be a thought-provoking lineup.
Buy your pass now to save up to $100 when you book by October 1. We can’t wait to see you in October!
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News aggregator SmartNews raises $230 million, valuing its business at $2 billion
SmartNews, a Tokyo-headquartered news aggregation website and app that’s grown in popularity despite hefty competition from built-in aggregators like Apple News, today announced it has closed on $230 million in Series F funding. The round brings SmartNews’ total raise to date to over $400 million and values the business at $2 billion — or as the company touts in its press release, a “double unicorn.” (Ha!)
The funding included new U.S. investors Princeville Capital and Woodline Partners, as well as JIC Venture Growth Investments, Green Co-Invest Investment, and Yamauchi-No.10 Family Office in Japan. Existing investors participating in this round included ACA Investments and SMBC Venture Capital.
Founded in 2012 in Japan, the company launched to the U.S. in 2014 and expanded its local news footprint early last year. While the app’s content team includes former journalists, machine learning is used to pick which articles are shown to readers to personalize their experience. However, one of the app’s key differentiators is how it works to pop users’ “filter bubbles” through its “News From All Sides” feature, which allows its users to access news from across a range of political perspectives.
It has also developed new products, like its COVID-19 vaccine dashboard and U.S. election dashboard, that provide critical information at a glance. With the additional funds, the company says it plans to develop more features for its U.S. audience — one of its largest, in addition to Japan — that will focus on consumer health and safety. These will roll out in the next few months and will include features for tracking wildfires and crime and safety reports. It also recently launched a hurricane tracker.
The aggregator’s business model is largely focused on advertising, as the company has said before that 85-90% of Americans aren’t paying to subscribe to news. But SmartNews’ belief is that these news consumers still have a right to access quality information.
In total, SmartNews has relationships with more than 3,000 global publishing partners whose content is available through its service on the web and mobile devices.
To generate revenue, the company sells inline ads and video ads, where revenue is shared with publishers. Over 75% of its publishing partners also take advantage of its “SmartView” feature. This is the app’s quick-reading mode, an alternative to something like Google AMP. Here, users can quickly load an article to read, even if they’re offline. The company promises publishers that these mobile-friendly stories, which are marked with a lightning bolt icon in the app, deliver higher engagement — and its algorithm rewards that type of content, bringing them more readers. Among SmartView partners are well-known brands like USA Today, ABC, HuffPost and others. Currently, over 70% of all SmartNews’ pageviews are coming from SmartView first.
SmartNews’ app has proven to be very sticky, in terms of attracting and keeping users’ attention. The company tells us, citing App Annie July 2021 data, that it sees an average time spent per user per month on U.S. mobile devices that’s higher than Google News or Apple News combined.
Image Credits: App Annie data provided by SmartNews
The company declined to share its monthly active users (MAUs), but had said in 2019 it had grown to 20 million in the U.S. and Japan. Today, it says its U.S. MAUs doubled over the last year.
According to data provided to us by Apptopia, the SmartNews app has seen around 85 million downloads since its October 2014 launch, and 14 million of those took place in the past 365 days. Japan is the largest market for installs, accounting for 59% of lifetime downloads, the firm noted.
“This latest round of funding further affirms the strength of our mission, and fuels our drive to expand our presence and launch features that specifically appeal to users and publishers in the United States,” said SmartNews co-founder and CEO Ken Suzuki. “Our investors both in the U.S. and globally acknowledge the tremendous growth potential and value of SmartNews’s efforts to democratize access to information and create an ecosystem that benefits consumers, publishers and advertisers,” he added.
The company says the new funds will be used to invest in further U.S. growth and expanding the company’s team. Since its last fundraise in 2019, where it became a unicorn, the company more than doubled its headcount to approximately 500 people globally. it now plans to double its headcount of 100 in the U.S., with additions across engineering, product, and leadership roles.
The Wall Street Journal reports SmartNews is exploring an IPO, but the company declined to comment on this.
The SmartNews app is available on iOS and Android across more than 150 countries worldwide.
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LinkedIn launches a $25M fund for creators, will test Clubhouse-style audio feature in coming weeks
When LinkedIn first launched Stories format, and later expanded its tools for creators earlier this year, one noticeable detail was that the Microsoft-owned network for professionals hadn’t built any kind of obvious monetization into the program — noticeable, given that creators earn a living on other platforms like Instagram, YouTube and TikTok, and those apps had lured creators, their content and their audiences in part by paying out.
“As we continue to listen to feedback from our members as we consider future opportunities, we’ll also continue to evolve how we create more value for our creators,” is how LinkedIn explained its holding pattern on payouts to me at the time. But that strategy may have backfired for the company — or at least may have played a role in what came next: last month, LinkedIn announced it would be scrapping its Stories format and going back to the proverbial drawing board to work on other short-form video content for the platform.
Now comes the latest iteration in that effort. To bring more creators to the platform, the company today announced that it would be launching a new $25 million creator fund, which initially will be focused around a new Creator Accelerator Program.
It’s coming on the heels of LinkedIn also continuing to work on one of its other new-content experiments: a Clubhouse-style live conversation platform. As we previously reported, LinkedIn began working on this back in March of this year. Now, we are hearing that the feature will make an appearance as part of a broader events strategy for the company very soon.
“We’ll be starting to test audio with a small pilot group in the coming weeks,” said Chris Szeto, senior director of product at LinkedIn, who heads up its audio efforts. “Given the trends in virtual, hybrid events we are also working on making audio part of our overall event strategy rather than a standalone offering, so that we can give people more choice about how they want to run and engage with their audiences.”
Notably, in a blog post announcing the creator fund, LinkedIn also listed a number of creator events coming up. Will the Clubhouse-style feature pop up there? Watch this space. Or maybe… listen up.
In any case, the creator accelerator that LinkedIn is announcing today is part of a bigger effort it’s been making to build out a platform for creating content. That has included building new tools and acquiring companies like Jumprope (a platform devised to make “how-to” videos) earlier this year. Together with the accelerator, the idea that LinkedIn wants to encourage more dynamic and lively set of voices to get more people talking and spending time on LinkedIn.
Andrei Santalo, global head of community at LinkedIn, noted in the blog post that the accelerator/incubator will be focused on the many ways that one can engage on LinkedIn.
“Creating content on LinkedIn is about creating opportunity, for yourselves and others,” he writes. “How can your words, videos and conversations make 774+ million professionals better at what they do or help them see the world in new ways?”
The incubator will last for 10 weeks and will take on 100 creators in the U.S. to coach them on building content for LinkedIn. It will also give them chances to network with like-minded individuals (naturally… it is LinkedIn), as well as a $15,000 grant to do their work. The deadline for applying (which you do here) is October 12.
The idea of starting a fund to incentivize creators to build video for a particular platform is definitely not new — and that is one reason why it was overdue for LinkedIn to think about its own approach.
Leading social media platforms like TikTok, Snapchat, Instagram and Facebook and YouTube all have announced hundreds of millions of dollars in payouts in the form of creator funds to bring more original content to their platforms.
You could argue that for mass-market social media sites, it’s important to pay creators because competition is so fierce among them for consumer attention.
But on the other hand, those platforms have appeal for creators because of the potential audience size. At 774 million users, LinkedIn isn’t exactly small, but the kind of content that tends to live on there is so different, and maybe drier — it’s focused on professional development, work and “serious” topics — that perhaps it might need the most financial incentive of all to get creators to bite.
LinkedIn’s bread and butter up to now has been around professional development: people use it to look for work, to get better jobs, to hire people, and to connect with people who might help them get ahead in their professional lives.
But it’s done so in a very prescribed set of formats that do not leave much room for exploring “authenticity” — not in the modern sense of “authentic self”, and not in the more old-school sense of just letting down your guard and being yourself. (Even relatively newer initiatives like its education focus directly play into this bigger framework.)
With authenticity becoming an increasing priority for people — and maybe more so as we have started to blur the lines between work and home because of COVID-19 and the changes that it has forced on us — I can’t help but wonder whether LinkedIn will use this opportunity to rethink, or at least expand the concept of, what it means to spend time on its platform.
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Epic Games appeals last week’s ruling in antitrust battle with Apple
Fortnite maker Epic Games is appealing last week’s ruling in its court battle with Apple, where a federal judge said Apple would no longer be allowed to block developers from adding links to alternative payment mechanisms, but stopped short of dubbing Apple a monopolist. The latter would have allowed Epic Games to argue for alternative means of serving its iOS user base, including perhaps, through third-party app stores or even sideloading capabilities built into Apple’s mobile operating system, similar to those on Google’s Android OS.
Apple immediately declared the court battle a victory, as the judge had agreed with its position that the company was “not in violation of antitrust law” and had also deemed Apple’s success in the app and gaming ecosystem as “not illegal.” Epic Games founder and CEO Tim Sweeney, meanwhile, said the ruling was not a win for either developers or consumers. On Twitter, he hinted that the company may appeal the decision when he said, “We will fight on.”
In a court filing published on Sunday (see below), Epic Games officially stated its attention to appeal U.S. District Judge Yvonne Gonzalez Rogers’ final judgment and “all orders leading to or producing that judgment.”
As part of the judge’s decision, Epic Games had been ordered to pay Apple the 30% of the $12 million it earned when it introduced its alternative payment system in Fortnite on iOS, which was then in breach of its legal contract with Apple.
The appellate court will revisit how Judge Gonzalez Rogers defined the market where Epic Games had argued Apple was acting as a monopolist. Contrary to both parties’ wishes, Gonzalez Rogers defined it as the market for “digital mobile gaming transactions” specifically. Though an appeal may or may not see the court shifting its opinion in Epic Games’ favor, a new ruling could potentially help to clarify the vague language used in the injunction to describe how Apple must now accommodate developers who want to point their customers to other payment mechanisms.
So far, the expectation floating around the developer community is that Apple will simply extend the “reader app” category exception to all non-reader apps (apps that provide access to purchased content). Apple recently settled with a Japanese regulator by agreeing to allow reader apps to point users to their own website where users could sign up and manage their accounts, which could include customers paying for subscriptions — like Netflix or Spotify subscriptions, for instance. Apple said this change would be global.
In briefings with reporters, Apple said the details of the injunction issued with the Epic Games ruling, however, would still need to be worked out. Given the recency of the decision, the company has not yet communicated with developers on how this change will impact them directly nor has it updated its App Store guidelines with new language.
Reached for comment, Epic Games said it does not have any further statements on its decision to appeal at this time.
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Spotify’s Clubhouse clone adds six new weekly shows, some that tie to Spotify playlists
This summer, Spotify launched its live audio app and Clubhouse rival, Spotify Greenroom, with the promises of more programming to come in the months ahead to augment its then primarily user-generated live content. Today, the company is making good on that earlier commitment, with the launch of six new shows on Spotify Greenroom focused on pop culture and music, in addition to what Spotify calls “playlist-inspired shows” — meaning those that are inspired by Spotify’s own playlists.
This includes a new show based on the popular playlist Lorem, which launched in 2019, showcasing an eclectic mix of music that has included indie pop, R&B, garage rock, hip-hop and more, focused on a younger, Gen Z audience. That playlist today has over 884,000 “likes” on Spotify and has risen to become one of the places new artists are able to break through on the platform. Now, Lorem listeners will be connected to “Lorem Life,” a Spotify Greenroom show that will feature a mix of culture and discussions about music, the environment, sustainability, fashion, and space, Spotify says. The show is hosted by Gen Z influencers and TikTok stars Dev Lemons and Max Motley, who will engage with other artists and influencers. It begins airing on Wednesday, September 15, at 9 PM ET.
Another new “playlist-inspired” show is “The Get Up LIVE.” If the name sounds familiar, it’s because “The Get Up” was introduced last fall as Spotify’s own take on a daily morning show by mixing music with talk radio-style content led by hosts who discuss the news, pop culture, entertainment and other topics. To date, that content has not been provided as a live program, however. Instead, the show has been pre-recorded then made available as a playlist that gives listeners the feel of a daily FM radio show. Now, “The Get Up’s” co-hosts Kat Lazo and Xavier “X” Jernigan will record their show live on Greenroom. The program was originally planning to launch Wednesday, Septtember 15 at 11 AM ET but has been delayed.*
This odd time seems to contradict Spotify’s original intention of providing a show for those who commute to the office. But with the rise of remote work in the face of the unending pandemic, addressing the commuter audience may be of less interest, with the new program. However, Spotify tells us “The Get up LIVE” will be complementary to the daily show, which will still run as normal — that’s why it has a later airing.
Other new Greenroom shows include “A Gay in the Life,” hosted by the married couple actor Garrett Clayton and writer and educator Blake Knight, who will discuss LGBTQIA+ news and issues (weekly, 8 PM ET, starting today); “Take a Seat,” hosted by Ben Mandelker and Ronnie Karam of the “Watch What Crappens” podcast, who will recap reality shows and dive into other pop culture fascinations (weekly, 10 PM ET, starting today); “The Movie Buff,” hosted by film buff and comedian Jon Gabrus, who will review and break down the latest hot movies (weekly, 11 PM ET, starting today); and “The Most Necessary: Live,” a complement to Spotify’s “Most Necessary” playlist, where host B.Dot will discuss up-and-comers in hip-hop (weekly, 9 PM ET, starting Tuesday).
In addition to the new programs, Deuxmoi’s show “Deux Me After Dark” will also air this evening (September 13) at 9 PM ET to recap the red carpet looks and gossip from this year’s Met Gala alongside guest Hillary Kerr, co-founder of Who What Wear.
Image Credits: Spotify
Greenrom is now available to listeners in more than 135 global markets and has been quietly expanding with live audio from sports site and podcast network “The Ringer” as well as from artists like Pop Smoke, the company says. Other programs added include Men In Blazers, Deaux Me After Dark, True Crime Rewind and Ask The Tarot. Many of the shows are also being published on-demand after the live show ends.
The app had gotten off to a slower start this year, given its roots had been in sports talk live programming, which didn’t necessarily connect with Spotify’s music fans. Plus, it has faced growing competition from not only Clubhouse, which inspired its creation, but also other top social networks like Facebook, Twitter, Reddit, Discord and more. Without dedicated programs to garner user interest in yet another live audio app, the company had only seen 141,000 new downloads for Greenroom on iOS a little over a month after its launch, and fewer on Google Play. But Spotify’s long-term vision for the service was to more closely tie Greenroom to the music, artists, programs and podcasts that were already available on its flagship music streaming app — and these new shows are an example of that plan in action.
*Update, 9/13/21, 2:18 PM ET: Following its announcement, Spotify reached out to let TechCrunch know it has decided to delay the launch of “The Get Up LIVE.” According to a company representative: “due to a scheduling change, The Get Up LIVE’s launch has been postponed and a new premiere date will be announced soon.”
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Epic Games to shut down Houseparty in October, including the video chat ‘Fortnite Mode’ feature
Houseparty, the social video chat app acquired by Fortnite maker Epic Games for a reported $35 million back in 2019, is shutting down. The company says Houseparty will be discontinued in October when the app will stop functioning for its existing users; it will be pulled from the app stores today, however. Related to this move, Epic Games’ “Fortnite Mode” feature, which leveraged Houseparty to bring video chat to Fortnite gamers, will also be discontinued.
Founded in 2015, Houseparty offered a way for users to participate in group video chats with friends and even play games, like Uno, trivia, Heads Up and others. Last year, Epic Games integrated Houseparty with Fortnite, initially to allow gamers to see live feeds from friends while gaming, then later adding support to livestream gameplay directly into Houseparty. At the time, these integrations appeared to be the end goal that explained why Epic Games had bought the social startup in the first place.
Now, just over two years after the acquisition was announced, and less than half a year since support for livestreaming was added to the app, Houseparty is shutting down.
The company didn’t offer any solid insight into what, at first glance, feels like an admission of failure to capitalize on its acquisition. But the reality is that Epic Games may have something larger in store beyond just video chat. That said, all Epic Games would say today is that the Houseparty team could no longer give the app the attention it required — a statement that indicates an executive decision to shift the team’s focus to other matters.
While none of the Houseparty team members are being let go as a result of this move, we’re told, they will be joining other teams where they will work on new ways to allow for “social interactions” across the Epic Games family of products. The company’s announcement hinted that those social features would be designed and built at the “metaverse scale.”
The “metaverse” is an increasingly used buzzword that references a shared virtual environment, like those provided by large-scale online gaming platforms such as Fortnite, Roblox and others. Facebook, too, claims the metaverse is the next big gambit for social networking, with CEO Mark Zuckerberg having described it as an “embodied internet that you’re inside of rather than just looking at.”
To some extent, Fortnite has begun to embrace the metaverse by offering non-gaming experiences like online concerts you attend as your avatar, and other live events. Ahead of its shutdown, Houseparty also toyed with live events that users would co-watch and participate in alongside their friends.
An Epic Games spokesperson tells TechCrunch the Houseparty team has worked on (and continues to work on) a number of other projects that focus on social. But some of the “multiple, larger projects” Epic Games has in the works remain undisclosed, we’re told.
In terms of social products, Houseparty’s technology now underpins all of Fortnite voice chat and the features they built are widely available for free to developers through Epic Games Services. They also worked on building out new social experiences, which have ranged from the social RSVP functions for Fortnite’s global events, like the recent Ariana Grande concert, to the upcoming “Operation: Sky Fire” event for collaborating quests and other game mechanics. More social functionality and new experiences are also being built into Fortnite’s user-generated content platform, Create Mode.
While it may seem odd to close an app that only last year experienced a boost in usage due to the pandemic, it appears the COVID bump didn’t have staying power.
At the height of lockdowns, Houseparty had reported it had gained 50 million new sign-ups in a month’s time as users looked to video apps to connect with family and friends while the world was shut down. But as the pandemic wore on, other video chat experiences gained more ground. Zoom, which had established itself as an essential tool for remote work, became a tool for hanging out with friends after-hours, as well. Facebook also started to eat Houseparty’s lunch with its debut of drop-in video chat “Rooms” last year, which offered a similar group video experience. And bored users shifted to audio-based social networking on apps like Clubhouse or Twitter Spaces.
Image Credits: Apptopia
According to data from Apptopia, Houseparty has been continually declining since the pandemic bump. To date, its app has seen a total of 111 million downloads across iOS and Android, with the majority (63 million) on iOS. The U.S. was Houseparty’s largest market, accounting for 43.4% of downloads, followed by the U.K. (9.8%), then Germany (5.6%).
Epic Games, meanwhile, said the app served “tens of millions” of users worldwide. It insists the closure wasn’t decided lightly, nor was the decision to shutter “Fortnite Mode” made due to lack of adoption.
Houseparty will alert users to the shutdown via in-app notifications ahead of its final closure in October. At that point, Fortnite Mode will also no longer be available.
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Dispo launches a test to gauge user interest in selling their photos as NFTs
Dispo, the photo-sharing app that emulates disposable cameras, started rolling out a test yesterday that will record user interest in selling photos as NFTs. Some users will now see a sell button on their photos, and when they tap it, they can sign up to be notified when the ability to sell Dispo photos launches.
CEO and co-founder Daniel Liss told TechCrunch that Dispo is still deciding how it will incorporate NFT sales into the app, which is why the platform is piloting a test with its users. Dispo doesn’t know yet what blockchain it would use, if it would partner with an NFT marketplace or what cut of sales Dispo would take.
“I think it’s safe to say from the test that there will be an experience native to the Dispo app,” Liss said. “There are a number of ways it could look — there could be a native experience within Dispo that then connects through an API to another platform, and in turn, they’re our partner, but to the community, it would look native to the Dispo app.”
Image Credits: Dispo
This marks a new direction for the social media app, which seeks to redefine the photo-sharing experience by only letting users see the photos they took at 9 AM the next morning. From Dispo’s perspective, this gimmick helps users share more authentically, since you take one photo and then you’re done — the app isn’t conducive to taking dozens of selfies and posting the “best” image of yourself. But though it only launched in December 2019, Dispo has already faced both buzzy hype and devastating controversy.
Until about a year ago, the app was called David’s Disposables, named after co-founder and YouTuber David Dobrik. The app was downloaded over a million times in the first week after its release and hit No. 1 on the App Store charts. In March 2021, the app dropped its waitlist and relaunched with social network features, but just weeks later, Insider reported sexual assault allegations against a member of Vlog Squad, Dobrik’s YouTube prank ensemble. In response, Spark Capital severed ties with the company, leading to Dobrik’s departure. Other investors like Seven Seven Six and Unshackled Ventures, which contributed to the company’s $20 million Series A round, announced that they would donate any profits from their investments in Dispo to organizations working with survivors of sexual assault.
Liss told TechCrunch in June, when the company confirmed its Series A, that Dobrik’s role with the company was as a marketing partner — Liss has been CEO since the beginning. In light of the controversy, Liss said the app focused on improving the product itself and took a step back from promotion.
According to data from the app analytics firm SensorTower, Dispo has reached an estimated 4.7 million global installs to date since launch. Though the app saw the most downloads in January 2020, when it was installed over 1 million times, the app’s next best month came in March 2021, when it removed its waitlist — that month, about 616,000 people downloaded Dispo. Between March and the end of August, the app was downloaded around 1.4 million times, which is up 118% year over year compared to the same time frame in 2020 — but it should be expected that this year’s numbers would be higher, since last year, the app’s membership was exclusive.
Image Credits: Dispo
Now, with the announcement that Dispo is pursuing NFTs, Liss hopes that his company won’t just change how people post photos, but what the relationship will be between platforms and the content that users create.
“Why NFTs? The most powerful memories of our lives have value. And they have economic value, because we created them, and the past of social media fails to recognize that,” Liss told TechCrunch. “As a result, the only way that a creator with a big following is compensated is by selling directly to a brand, as opposed to profiting from the content itself.”
Adding NFT sales to the app offers Dispo a way to profit from a cut of user sales, but it stands to question how adding NFT sales could impact the community-focused feel of Dispo.
“I think there is tremendous curiosity and interest,” Liss said. “But these problems and questions are why we need more data.”
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Tinder adds a new home for interactive, social features with launch of Tinder Explore
Tinder is redesigning its app to put a larger emphasis on its social, interactive features with the launch of “Explore,” a new section that will feature events, like the return of the popular “Swipe Night” series, as well as ways to discover matches by interests and dive into quick chats before a match is made. Combined, the changes help to push Tinder further away from its roots as a quick match-based dating app into something that’s more akin to a social network aimed at helping users meet new people.
This shift could resonate better with a younger generation that may feel like traditional online dating has lost its novelty. Today, these users are turning to apps marketing themselves as places to meet new friends, while newcomers to the dating app industry are experimenting with other means of connecting users — such as with short, TikTok-like videos, as in Snack, or even audio, as in SwoonMe. For Tinder, these market shifts may have represented an existential threat to its own business. But instead, the company has doubled down on interactivity as being core to the Tinder experience, and as a means of maintaining its dominant position.
At launch, Tinder Explore will include a handful of existing features alongside a new way to meet people. The latter allows users to connect with others based on interests — like Foodies, Gamers, Music Lovers, Social Causes, Entrepreneurs and more. Over time, more interests will be added, which will allow Tinder members to find someone based on what they’re like, rather than just what they look like.
Image Credits: Tinder
Explore will also be home to Tinder’s “Swipe Night,” the interactive series that launched in 2019 as an in-app “choose your own adventure” story which helped to boost Tinder engagement as it gave users a reason to relaunch the app at a specific time. Tinder hailed “Swipe Night” as a success, saying the feature attracted over 20 million users during its first run and led to a 26% increase in matches. In November, the series will return — this time, with new characters and a new “whodunit”-style storyline. It will now also leverage the “Fast Chat” feature that powers Tinder’s “Hot Takes” experience, which allows unmatched users to chat.
“Hot Takes” will also appear in Tinder Explore, which the company describes as a more low-stakes way to match with other users. As a timer counts down, users who are chatting can choose if they want to match. If the timer expires, they meet someone new — similar to an online version of speed dating. Since launching this summer, millions of Tinder users have tried “Hot Takes,” which is only available from 6 pm to midnight local time.
However, the bigger story about Tinder Explore isn’t just what sort of features it will host now, but what the company has in store for the future. Earlier this year, Tinder parent Match bought the Korean social networking company Hyperconnect for $1.73 billion — its largest acquisition to date. And it’s preparing to use Hyperconnect’s IP to make the online dating experience even more interactive than it is today, having announced plans to add audio and video chat, including group live video, to several of its top dating app properties, Tinder included.
Tinder Explore provides a platform where features like this could later be added — something Tinder hints toward0s, noting that the section is designed to offer users access to “a growing list” of social experiences with “many more to follow.”
“A new generation of daters is asking for more from us in the post-Covid world: more ways to have fun and interact with others virtually and more control over who they meet on Tinder,” said Tinder CEO Jim Lanzone, in a company announcement. “Today’s launch of Explore is a major step in creating a deeper, multi-dimensional, interactive experience for our members that expands the possibilities of Tinder as a platform,” he added.
Tinder Explore began rolling out to major English-speaking markets on Wednesday, September 8, and will be available globally by mid-October.
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