Reddit confirmed it has acquired Dubsmash, a short video website. The terms of the contract were undisclosed. Dubsmash will maintain its own website and brand, and its video production software will be integrated with Reddit. Reddit will be joined by its co-founders, Suchit Dash, Jonas Drüppel and Tim Specht.
The app has raised $20.2 million from investors, including Lowercase Capital, Index Ventures, Eniac Ventures, Heartcore Capital and Sunstone Life, according to Crunchbase data.
Dubsmash is now one of the biggest rivals of TikTok but suffered for many years during its first incarnation as a lip-sync video app after a brief stint of success in 2015. It started transforming itself into a social network in 2017 and moved its headquarters to Brooklyn from Berlin. At the beginning of this year when app instals were counted, Dubsmash’s share of the United States’ short-form video market was second only to TikTok, and it reportedly held acquisition talks with Facebook and Snap.
Over 4 rounds, Dubsmash raised a total of $20.2M in support. Their new funding was received from a Venture – Series Unknown round on Mar 28, 2019.
10 investors are funding Dubsmash. The new investors are Sunstone Life Science Ventures and Eniac Ventures.
According to PrivCo, Dubsmash has a post-money value in the range of $10M to $50M as of Nov 30, 2016. To see correct appraisal and check companies with similar valuations, sign up for a free trial.
The credit for much of the success of Dubsmash goes to users of Black and Latinx. Although many of the highest-profile stars in TikTok are white, Dubsmash is known for its broad Black and Latinx content creator communities.
Earlier this year when the New York Times published a story about how dance moves by Black Dubsmash stars are often appropriated by TikTok influencers without credit, the polarization between the two apps began to gain more prominence, which means their developers lose out on opportunities such as larger follow-ups, brand deals and business connections.
Last year when he stepped down, founder and former chief executive officer Alexis Ohanian called for his spot on the board of Reddit to be filled with a Black nominee.
In today’s announcement, Reddit related its acquisition of Dubsmash to its inclusion efforts, recognising that the “communities of the app are driven by young, diverse creators,” about 25% of all Black teenagers in the U.S. are on Dubsmash, and 70% of users are women.
It also mentioned that the incorporation of the video production tools from Dubsmash would enable Reddit users to express themselves in original and genuine ways that are endemic to our communities.”
Reddit said that use has increased dramatically since the launch of native videos in 2017, increasing by 2X in 2020 alone.