The US company behind anonymous messaging app Yik Yak secured funding to the tune of $62 million, giving it a valuation of between $300 million and $400 million, according to The Wall Street Journal (WSJ).
Launched a year ago, Yik Yak is an anonymous local bulletin board for people located in the same area, making it popular on school and university campuses. It is used at around 1,500 colleges, according to WSJ, and is regularly listed in the top 60 free apps in Apple’s App Store.
Sources said Sequioa Capital led the funding round, which is Yik Yak’s third this year. Sequioa partner Jim Goetz is believed to be joining the board, while current investors are also believed to be participating in the funding round.
The messaging market has become increasingly crowded but the megadeal which saw Facebook buy WhatsApp for $22 billion has understandably driven investor interest. In addition, Snapchat has seen its valuation reach $10 billion.
Sequioa did well out of its involvement with WhatsApp, with a WSJ source saying it earned more $3 billion via the Facebook deal from an investment of $60 million, so it clearly has confidence in the potential of Yik Yak.
Yik Yak has, however, been criticised for its potential to enable cyber-bullying. In response, the company has tried to restrict the app’s use through geo-fencing around school campuses, with only partial success.
The company’s co-founder Tyler Droll has stated that high-school students have not demonstrated the necessary maturity to use the app. The company will therefore try to keep the service out of schools until the company has better controls in place.
The app currently requires users to be 18 or over, or 17 if permitted by a parent or guardian.
Fellow anonymous apps Secret and Whisper have also made progress this year, with the makers of both titles having raised millions of dollars.