Invitation only audio chat application went from a valuation of $100 million to $1 billion in one month.

Clubhouse Application, Photo by Christoph Dernbach/picture alliance via Getty Images

Clubhouse, recently mentioned in the news as the fastest growing social media application has climbed App Store charts across the world in the recent weeks. Released in April of 2020, as an iOS only platform, Clubhouse has taken the spotlight in the news by being the first of its kinda application. During the early months of the pandemic, the company was able to score a Series A funding round of $12 million from the private venture capital Andreessen Horowitz (AH Capital Management), located in Menlo Park, California.

Since then, as of December 2020, the platform had a total of 600,000 users that accumulated by the organizations invite one system. That’s right, can’t just hop on the application as fast as making a TikTok account. As the application is only iOS based for now, the company announced recent plans to break into the Android market to cover both ends of the spectrum.

There are no pictures, no videos, just the voices of people in a chat part having an old school conversation. Think of it as Houseparty (application launched by Epic Games in 2019 to have group video calls), except without video. Every new user gets two invites which they can give to people to obtain a membership. The more the application is used, more invites become available.

Alpha Exploration Co. the company behind Clubhouse was quickly worth $100 million in valuation after having the Series A funding round from AH Capital Management. During the time of their valuation at $100 million, the platform only had 1,500 users. Fast forward to January 24th, 2021, AH Capital Management made another investment round of $100 million dollars in a Series B funding round, quickly bringing the application to a valuation of $1 billion US dollars.

Now, with over 3 million users, a 2.4 million user gain from December 2020, Clubhouse is looking to expand while still being an invite-only platform.

On January 31st, 2021, Elon Musk was quick to give a 1.5 hour interview on the platform bringing the audience to 5,000 people in one room, which is the limit. Quickly after, the platform gained a lot of recognition and sparked curiosity about the application itself and what their next plans are. The full interview with Elon Musk be found here.

What does this mean for the platform financially?

By having a total of two reported funding rounds from AH Capital Management totalling to about $112 million and being valued at $1 billion dollars, investors are looking to find investment opportunities into the company.

On Monday February 1st, 2021, Clubhouse Media (OTCMKTS: CMGR) hit an all time high reaching $18 a share with an increase of 116% to the share value.

Many speculate the stock increased after Elon Musk tweeted about a social media application of the same name. The “Elon Effect” is yet to continue, with Clubhouse being the nest target.

The surge was quick to happen because of the recent popularity the company is gaining by having celebrities such as Elon Musk and Mark Zuckerberg taking the stage, bringing the company a decision to consider various ways of expansion. Not only are big CEOs joining the application, but even celebrities such as Kevin Hart, Drake, Tiffany Haddish, and many more are joining the application bringing popularity to the platform.

The next moves for the company seem to be expanding to different application markets such as Android, and making the application public instead of invite only so people can get the chance to have a taste of what the platform has to offer. With many more users and many more investors ready to potentially take a leap forward, the future for Clubhouse is looking very interesting as another social media platform has joined the race to gain popularity.

What do you think? Is Clubhouse something you want to try out? Let us know!

Written by: Karthik Ganapathiraju, Wil Peters, and Aneeshan Balakaran




Emerald Investment Analysts are a group of post-secondary students who strive to provide financial literacy education through extensive research and financial analytics. We aim to provide in-depth knowledge by analyzing different market sectors to create a portfolio.

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