Twitter's Acquisition Talks with Clubhouse

Twitter reportedly engaged in discussions regarding the potential acquisition of Clubhouse, the live audio networking platform. Sources indicate a possible deal valuation of approximately $4 billion, as detailed in a Bloomberg report.

TechCrunch has corroborated these conversations through a source with direct knowledge of the negotiations.

Negotiations Ceased

Although discussions spanned several months, they have since been discontinued. The specific reasons for the breakdown remain undisclosed, according to the report.

Notably, Bloomberg recently reported Clubhouse was seeking a new funding round with a $4 billion valuation. However, the acquisition talks with Twitter reportedly fell apart first, prompting a shift in strategy towards securing capital through equity investment.

Competitive Landscape

Twitter has developed a comparable feature, Spaces, a live audio chatroom functionality that is being progressively released to its users.

Clubhouse recently initiated its first monetization strategy with Clubhouse Payments, enabling users to send direct payments to creators on the platform, contingent upon the creator enabling payment reception.

Clubhouse Payments Structure

Interestingly, Clubhouse itself does not profit directly from these payments. Instead, creators retain 100% of the funds received, minus a small processing fee paid to Stripe, the payment processor facilitating the virtual tips.

Valuation and Future Prospects

The proposed acquisition price appears substantial, particularly considering Twitter’s advancements with Spaces. While Clubhouse initially gained significant traction, questions persist regarding its long-term viability.

Furthermore, numerous platforms are replicating Clubhouse’s functionality, raising the classic startup debate: is it a standalone product or simply a feature?

Impact on Funding

The timing of this news likely aims to generate interest for Clubhouse’s discussions with potential investors, supporting its desired valuation for the upcoming funding round.

This activity and attention surrounding a consumer software venture are particularly noteworthy after a period considered relatively quiet for the sector.