Flipagram’s A Big Deal
How big? The last startup that had Michael Moritz and John Doerr on the same board was Google.
Farhad Mohit wasn’t panicking (he’d started and sold two websites before), but at the end of 2013 the entrepreneur realized his startup was going to run out of money by February. Two days before Christmas his wife gave birth to their second child at home, with the midwife stuck in trafc. He promised his wife that, if the company ran out of cash, he would stop adding more of his own to keep it going.
But Mohit’s prospects were not as grim as the bank account indicated. His startup owned an app called Flipagram, which lets people make “Flips,” a mashup of videos, photos, text and 30-second snippets of hit songs. Starting in October, a series of updates to the app, including making it free, were already pushing Flipagram up the app charts. By the time his baby arrived Flipagram had reached No. 1 in iphone downloads in 87 countries and had millions of users per month. Before Mohit even had a chance to hit up new investors, Sequoia Capital called to meet right away. Too busy, Mohit pushed it into January, when Sequoia sent its billionaire partner Michael Moritz and colleague Tim Lee to Los Angeles to meet Mohit at his home, which doubled as Flipagram’s ofce. They chatted over a homemade lunch of Persian food. By February, Sequoia, Kleiner Perkins Caufeld & Byers and Index Ventures combined to invest $70 million.
What they wanted was a piece of the next social growth monster. By the end of 2014 Flipagram was up to 30 million users per month. Facebook took at least three years to get that far. Snapchat took two years. Flipagram did it in one. The app is still in the top ten of photo and video apps by IOS downloads in the U.S., and the number of Flips made in the app rose 165% from the third quarter of 2014 to the same period this year. “The [music labels] really believe that Flipagram will be a major media creation and sharing company on the order of a Twitter or more,” says board member John Doerr of Kleiner Perkins. “Farhad is visionary.”
Flipagram’s big insight was that people want a way to make videos faster than one can post on Youtube and with more creative freedom and depth than Twitter’s Vine or Facebook’s Instagram. “It’s a human thing,” Mohit said. “Everyone has stories worth telling.” Flipagram’s big diference is in letting people add 30-second snippets of music (increasing to 60 seconds as of December) to their videos from a searchable catalog of tens of millions of tunes. Mohit used some of that $70 million to strike global licensing deals with nearly all of the major record labels and publishers. Instagram doesn’t let users add music to videos within the app. Vine limits users to a small set of featured music or music they own. Flipagram also adds a prominent link to buy the entire song on itunes or Spotify.