The hype cycle for anonymous chat apps appears to be coming to an end. Secret, which had received $35 million in funding, shuttered in 2015. Earlier this year, gossip app Yik Yak, which was once valued at $400 million, sold its engineering team to Square for just $3 million. Now, one more competitor in the once-hot anonymous messaging space also seems to be fighting to stay above water. Los Angeles-based Whisper laid off 20 percent of its staff last month, and now it would appear its high-profile board members have left their positions, too.
The Los Angeles Times reports that Sequoia’s Roelof Botha, Lightspeed’s Jeremy Liew, Shasta’s Sean Flynn, and investor John Hadl all recently left their board-of-director positions with the start-up, which had raised $60 million in funding at a $200 million valuation at its peak in 2014. The investors and representatives for their firms all declined to comment to the Times. But according to three sources who spoke to the paper (on condition of anonymity, naturally), the company’s founders, Michael Heyward and Brad Brooks, may be orchestrating an attempt to buy out early investors to regain control of the company themselves. It remains unclear whether its founders are using their own money to orchestrate some kind of buyout or if other investment firms are financing it. (Whisper was not immediately available for comment.)
It’s not clear what’s next for the start-up, which has struggled to turn a profit from its 30 million monthly users. Earlier this year, Heyward said his company would begin focusing on marketing and advertising. The Times reports that Whisper solicited investment from places like Time Inc. and advertising agency WPP. More recently, however, Whisper’s problems have seemed more existential: the company raised $7.7 million in debt in 2013, and $25.5 million in a flat valuation equity offering in 2014 that pays those buyers first in the event of a sale. During a round of layoffs a month ago, in which 14 of Whisper’s 71 employees were let go, Heyward told TechCrunch that his goal was “getting the company cash-flow positive.” Reducing the company down to its bare bones and doing away with board members to regain control of the company is certainly one way of doing that.
