Yik Yak, an anonymous gossip app that launched in November, has raised $US10 million from DCM, Azure Capital Partners, Renren Lianhe Holdings and Tim Draper. The fundraise comes just a few months after the company raised a $US1.5 million seed round.
The 7-month-old app was founded by two Kappa Alpha fraternity brothers, Brooks Buffington and Tyler Droll, who graduated in 2013 from Furman University in South Carolina. The pair worked on a few startup ideas together during their senior year and put their careers on hold to build a company after they graduated. They moved home to their parents’ houses in Atlanta, Georgia, worked at Panera, and bootstrapped.
Their first idea, a social poll product called Dicho, didn’t gain traction. Droll came up with the next idea, an app that might haven been popular at a small school like Ferman, which only has 3,000 students. That idea was Yik Yak, a hyper-local place to rant about anything anonymously with people in your community. Yik Yak posts, which are text-only and limited to 200 characters, can only be read by people in a 1.5 mile radius of the poster.
Droll and Buffington presented Yik Yak to their friends who were still at Ferman. But they fibbed and said the app had been built by Harvard students to give it credibility. “It just blew up,” Buffington says.
That Christmas, the pair crafted some email pitches with clever headlines to Greek life organisations on a variety of campuses. Buffington says only one student needs to download Yik Yak for it to snowball; one university had 2,000 people sign up within the first day.
Since January, the founders say growth has been organic and the app is used heavily (by thousands of students) on about 250 campuses. At some of the schools, as many as 10,000 students are on it and 100 new messages are posted every ten minutes. At smaller schools, the app has penetrated 80% of student bodies.
Although the founders claim the majority of content on Yik Yak is positive, some messages are horrific. Like its anonymous predecessor Juicy Campus, Yik Yak has become known as a place for bullying and nasty comments without repercussions for the posters. Its hyper-local nature makes it easy to say something cruel about a specific individual and have it spread, even though the app removes posts that contain people’s names.
“K. is a slut,” one Connecticut high school student wrote on Yik Yak. “No one asked H. to prom because no one has a forklift,” another wrote.
One Silicon Valley investor told Business Insider that his firm had a discussion about apps like Yik Yak and opted not to invest in any of them. The apps, this person said, had a tendency to produce more harm than good, and the firm didn’t want to take part in that.
Another investor, Brenchmark’s Bill Gurley, wonders how anonymous apps like Yik Yak, Secret or Whisper will make money. Most social networks make money through advertisements, Gurley says, and what advertiser wants to be associated with anonymous self-help and nasty content?
Buffington hopes that in time, people will see Yik Yak for the good it produces and stop associating it with cruel rumormongering.
“When Snapchat first came out, everyone heralded it as a sexting app,” he says. “Hopefully when we get passed all of that initially, people will realise Yik Yak is not just a place for gossip.”