Silicon Valley investors are turning to live video chat apps for their next ventures, exemplified most recently by a newest funding for Houseparty, a popular group chat application released early this year.
The Meerkat-born app has perched atop charts this year, increasingly becoming the choice app for people, especially millennials, to engage in videoconferencing of late. Houseparty on Friday eclipsed Facebook as the number one app on Apple's App Store.
Houseparty's Latest Funding Round
In its latest round of funding, Houseparty was able to raise $50 million from venture capital firm Sequoia Capital, beating out other investors who elbowed each other, including Aleph, Comcast Ventures, and Greylock Partners, The Wall Street Journal reports.
This is not the first investment Sequoia Capital has handed out for similar apps; it already has a foothold in social and video, having previously invested in WhatsApp, which Facebook picked up for $19 billion two years ago. The firm has also invested in YouTube and Instagram prior.
Houseparty's present valuation hasn't been disclosed. The company's official name is Life On Air, and Ben Rubin, the chief executive, didn't respond to the WSJ's comment requests.
Is Meerkat Making A Comeback With Houseparty?
In 2015, Life On Air's live video streaming app called Meerkat surged to popularity, having earned $14 million in a funding led by Greylock Partners along with a number of others.
The app, which debuted last year, had become an instant hit, only to be wounded by the entrance of Periscope, a video app later acquired by Twitter for $100 million.
On Sept. 30 this year, Life On Air officially declared Meerkat defunct, billed as a "bittersweet" moment for Rubin.
With Houseparty, Life On Air hopes to once again corner the video conferencing market with social networking in mind, which is an attractive fusion of elements for millennials. It remains to be seen whether Life On Air has learned from previously treading shoddy waters with Meerkat, but Houseparty currently sits seventh place on the list of top free apps on the App Store, between Instagram and Facebook.
The past six months have seen millions of downloads for Houseparty, according to analytics from Apptopia, estimating that nearly 2 million people used the app last month and that users are opening the app 5.5 times a day on average.
Houseparty's long-term success depends on a number of key factors, one of which is figuring out how to remain relevant to millennials, a huge market with a highly unstable and oft-changing set of interests. One moment it could be dating app Tinder, another moment it could be Houseparty, and another moment could lead to something else entirely.
The trick is for Live On Air's Houseparty not to lose momentum in the long run. Otherwise it'll follow the footsteps of its predecessor. In the meantime, a fresh $50 million funding should help them paddle forward.
