Yik Yak has reportedly raised a whopping $62 million in venture capital in a round led by none other than Sequoia, according to the Wall Street Journal. Jim Goetz, the Sequoia partner who made the firm’s insanely profitable WhatsApp bet, is supposedly joining Yik Yak’s board. The company is rumored to be valued in the “low hundreds of millions,” which has people in tech wondering what’s going on.
But although its hype cycle is just beginning, Yik Yak already faces some seriously threatening competition, from the very media giant it aims to unseat: Twitter.
Yik Yak, the little-known social network out of Georgia, came out of left field. For a long time in Silicon Valley, it was seen as the bastard third child of the anonymous messaging trend, an afterthought tacked onto stories about Secret and Whisper.
But as I chronicled last month, Yik Yak rose to prominence in the rest of the nation while escaping the gaze of the tech echo chamber. It spread virally, Facebook-style, through college campuses and made its way onto the Today show and C-SPAN, albeit for less than savory reasons (cyberbullying and school violence threats have been a big problem on the app).
Yik Yak’s quiet period in tech ends now. With funding from one of the more hallowed VC institutions, the app is officially on the Silicon Valley map.
It might surprise people that Yik Yak thinks it’s going after Twitter, since in the past it has always been grouped with Secret and Whisper. But Yik Yak doesn’t consider itself an anonymous app — as on Twitter, Yik Yak users can pick any username they like. They can choose to be anonymous or to identify themselves by name.
When I interviewed Yik Yak’s founders last month, they told me point blank, that they were trying to build Twitter for the next generation. “We’re taking business away from Twitter,” co-founder Brooks Buffington said. “College students don’t use Whisper.”
I wouldn’t be surprised if that was their pitch to VCs too, and the reason for their rather robust valuation.
At the time, I noted that Yik Yak’s killer tool to rival Twitter was a pin-dropping feature that lets you see all the posts in a geographical area. It’s a way to eavesdrop on the chatter of a place, during events like games or music festivals. More significantly, it could be used to track crises like Ferguson in real time from the ground.
Soon after Yik Yak introduced its geolocation tool, Twitter showed off its own version, albeit in a preview. Location-based Twitter curation would allow people to browse tweets coming from a particular neighborhood in a city. Staff revealed the feature during Twitter’s analyst call, without specifying the launch date. It looked almost identical to Yik Yak’s.
Twitter has promised a lot of cool features and not delivered for awhile, so it may very well fail to complete this one. But if it succeeds, Twitter has far more users from a much wider demographic. Its location-tweets feature would, at this point, put Yik Yak’s to shame.
Yik Yak disagrees. After Twitter’s preview, Yik Yak’s founders told me via email, “We’re interested to see how this new feature is accepted by users because, while Twitter does have an immense infrastructure and user base, the platform is not designed solely around hyper-locality as Yik Yak is.”