Bluesky's user surge could spark new investment
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Upstart social network Bluesky is getting inbound interest for a large new investment round, just weeks after raising $15 million in Series A funding, Axios has learned.
Why it matters: Bluesky has become a post-election refuge for millions of Twitter/X users.
- It had expected the Series A money to last at least two years, but sudden growth could cause it to change those plans.
- The company recently said that it now has more than 20 million users, while SimilarWeb reports that the app's usage grew more than 5x in the past two weeks.
The big picture: Venture capitalists don't try to time markets, although timing still can be the difference between a single and a grand slam.
Zoom in: Plenty of VC-backed social networks have flamed out after hot starts. Remember Ello?
- Bluesky investors, however, believe the company's momentum could be sustained by an open architecture that's appealing to techies and a basic UI that's not off-putting to normies.
What they're saying: "Our thesis is that the open ecosystem isn't just for the Bluesky product, but also for developers to build on and leverage the broader social network," says Kinjal Shah, a general partner with Blockchain Capital, which led Bluesky's Series A round (she also joined its board). "We've had a lot of social stagnation over the past decade or two, so this feels refreshing."
- True Ventures partner Toni Schneider adds: "This puts control in users hands, at a time when lots of other networks have been getting more closed ... It feels a lot like the early days of Twitter, when users experimented and created things like hashtags."
- Neither Shah nor Schneider would discuss if and when Bluesky will raise more money.
The bottom line: There's conventional wisdom that 100 million is the magic number for social media companies to monetize.
- But that might not be as true for Bluesky, since it may be difficult to serve ads to users who can choose their own experience on a decentralized network.
- Instead, expect the company to eventually seek to make money via usage and product add-on features. Innovation that could be accelerated with more investment.
