Formerly an economics and humanities student at UCLA, Oe Kaori is now an intern for the United Nations.
Quibi is Not Viable
Quibi is shutting down. Jason Calacanis's latest startup is going out of business, a source close to the company confirmed to TechCrunch. Quibi is in a tricky position.
The company announced last week that it was raising $500 million at a $2 billion valuation. The round was led by China Media Capital, China’s state-backed international media investment fund, with participation from Lightspeed Venture Partners and Tiger Global Management, who are both major backers of Quibi. The company also revealed that it was considering closing up shop entirely. “Quibi may cease operation and, if the company does so, may not distribute any of the balance of the funding raised,” reads a post on Quibi’s website.
The FAQs and FAQs section of the site are both out of date. It’s certainly the most significant blow to the venture capital community this week, although other exits are happening as well. Hyperloop is reportedly bidding goodbye to AngelList’s Boltspace fund. DFJ’s current portfolio is reportedly also falling apart with partner Jeff Jordan’s departure from the firm. We’re also still awaiting word on Quibi’s losses on the news that Instagram is going to IPO. Quibi was unveiled 6 months ago and is in the business of producing short-form videos.
The company’s CEO was released in November 2016 after it was announced that Quibi was not going to make a profit until 2019. (It turns out that Calacanis was telling one of his sources otherwise.) Calacanis offered a very rosy review of the company in a Medium post that was published last Thursday. “I believe that if Quibi was valued in January of 2017 at its $200 million raise, it would be worth $3 billion today,” he wrote. “Quibi is not a traditional startup. Quibi's revenues are growing. Quibi's content is good. Quibi's technology is sound. Quibi's payments are working. All the ingredients are there for Quibi to become the next Netflix, the next HBO, or the next Hulu.”
It’s no surprise that Quibi is shutting down. The company was never going to be profitable in a few years’ time, especially when the entire landscape of the media industry is up in the air, including the possibility of a fully autonomous future that is looking to rob media companies of much of their revenue.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Oe Kaori