Viddy To Return $18 Million Back To VCs
Viddy is startup that is known as being an “Instagram for Video.” Viddy directly competed against a company called SocialCam, which was acquired by Autodesk for $60 million in July 2012. Viddy, on the other hand, seems to have already peaked.
Viddy most recent round of funding was $30 million in April 2012. The investors in that round included Khosla Ventures, Goldman Sachs, New Enterprise Associates, Roc Nation (Jay-Z), Overbrook Entertainment (Will Smith), Biz Stone (Twitter co-founder), Brian Lee (ShoeDazzle CEO), and pop artist Shakira. Viddy had so much traction that the company even refused a $100 million offer from Twitter.
Viddy can attribute a lot of their growth to promotion on Facebook, but that no longer became a source of growth when the social network company changed their News Feed algorithms. Most of Viddy’s executive team left the company including the CEO and head of business development since then. Around one-third of the staff was laid off this past February.
The team that remains at Viddy remains optimistic and they are getting leaner. This is why they are returning $18 million back to investors and they will use the remaining funding to try out a few more product launches.
“Viddy raised a substantial amount of capital last year, during different market conditions,” said Viddy president JJ Aguhob in an interview with AllThingsD. “A year later, Viddy is a leaner, product-focused organization that is steadily growing its audience and will soon be releasing new products. Our late-stage investors have been very supportive, but it just makes good business sense to return capital we do not need and have a clean balance sheet in the process.”