US-based ‘anonymish’ microblogging app developer Secret is set to shut down and will return its remaining money to investors including internet company Google, CEO David Byttow revealed yesterday in a blog post.
Founded in 2013, Secret was the operator of an app allowing users to post gossip or confessions anonymously to a network of friends.
The company raised $1.2m in seed funding in December 2013 from Google’s corporate venturing arm Google Ventures, Kleiner Perkins Caulfield & Byers (KPCB) and Alexis Ohanian, co-founder of social network Reddit.
Google Ventures, KPCB and Ohanian all contributed to an $8.6m series A round three months later that also included Gary Tan. Secret then raised $25m at a valuation of more than $100m in July 2014 from backers including Ohanian, Tan, Index Ventures, Redpoint Ventures, SV Angel, Fuel Capital and Ceyuan Ventures.
Secret initially attracted a good deal of interest after its launch in early 2014, but also notoriety based on its potential for fuelling cyberbullying and the spreading of malicious lies about individuals or organisations.
However, the app’s novelty soon dissipated and it plunged down the app sales rankings. Co-founder Chrys Bader-Wechseler left the company in January this year following a redesign that removed the square pictures for which it was known in favour of a text display almost identical to that of competitor Yik Yak.
At the time of Bader-Wechseler’s departure Secret had a reported 15 million users. Byttow told TechCrunch last month the company was working on new features and had no plans to shut down, only to subsequently change his mind.
Byttow said: “This has been the hardest decision of my life and one that saddens me deeply. Unfortunately, Secret does not represent the vision I had when starting the company, so I believe it is the right decision for myself, our investors and our team.
“Secret, Inc. still has a significant amount of invested capital, but our investors funded the team and the product, and I believe the right thing to do is to return the money rather than attempt to pivot. Innovation requires failure, and I believe in failing fast in order to go on and make only new and different mistakes.”
The company’s closure may also concern among competitors such as Yik Yak, which raised $62m in November 2014, and Whisper, which announced yesterday that its app has reached 10 million monthly users.
Perhaps significantly however, both companies have targeted the teen market whereas Secret was best known for its membership base in the technology sector.