TWIG Clips: Voodoo's $500M BeReal acquisition

[Music] let's be real here so so woodoo acquires be real and it was posted that was 500 million acquisition of B now what is B it is a French photo sharing app where you have fleeing photos that you post once per day so that was their unique selling proposition like hey Jen hop on in post your photo right now and you can see everybody else's photo so it was like a cool gimmick it was launched in 2021 and it started scaling in the late 2021 So Co lockdown Peaks and it actually peaked in 2022 with 14 million downloads a month and that was in September this is data from sensor Tower and it has been a real shark fan a shark fan as you have seen so 14 million months then it goes to 5 million in so 14 million downloads in a month then goes to 5 million just a couple of months later downloads and then today it was making like 1.4 million downloads a month so a tenth

of what it did in 2022 and of course as they have been declining from this shark fan the app was apparently pivoting more to why don't you post more photos than just ones that that makes sense and then they were like hey what else would be cool influencers and celebrities of course and you know like everything to stay relevant essentially but nothing to sneeze at these boys started I don't know if they're boys I I just want to call them boys this is like folks I mean there's two male Founders Pierre and and I don't know I'm just coming up with French names uh there there two French Founders and they started this company and listen in a really short amount of time they got 120 million downloads so even though it looks like a shark finan this is nothing to sneeze at the boys did good and now woodoo has acquired this company at a $500 million valuation not for $500 million for the valuation of a $500 million

and in that news in that press release it was said the CEO of voodoo own social app wiiz so wodoo has a portfolio of social apps will take over as the CEO of be real so if we're being real in corporate terms this is interpreted as woodoo believes they will run this company better than the founders ever could now let me go to analysis fire sales on $500 million valuation so John Wright posted right away hunting for clicks he posted in a post idfa world where we don't know as much about users anymore data is even more important a social media platform has Oodles of Behavioral and user-based data which is more valuable than ever I don't know English accent I can't do it but this wasn't in engl so so he saying this a great deal because there's no other social networks you can get for under certain amount of billions and he points out that this is especially good because it caters to gen Z the young folks and he you know REM reminds people that

woodoo has branched out of games into Apps which they have successfully and now they can cross promote and track users going through all their apps and services now Mr Phil was countering this point actively on Linkin so I got this i got this on WhatsApp from John I didn't even follow LinkedIn I get these like Photo scares like look what's what's up with Phil anyway so Phil comes in and he does a quick napkin calculation somewhere wherever he's traveling with his uh with his future wife $12.5 LTV per user and he's scratching his head it doesn't make any sense but the way Phil is calculating is that this has been acquired for $500 million cash where we actually don't know the deal structure meaning that woodoo could have paid $1 and the you know 500 million is an earnout like whatever it is we just don't know the structure of this deal so we actually don't know how much they're paid and what are the different terms of how much these you know owners and how

much they will pay in the end and the second thing is like with these type of acquisition I don't think it's 1+ 1 is two because there can be different exponential valuations for example mobile developers trade sometimes at between especially nowadays between 1 to 2x Revenue while social platforms have a much higher valuation trade at four or five times the revenue so that could be that type of a play and overall like thinking about the this there's two ways of thinking about this Chris you can explode soon there's two ways of thinking about it one is thinking about it from the perspective of evaluation so this is the type of an asset that will increase the valuation because it it will add a social network as a part of voodoo's portfolio and the other a part is thinking about it from the sort of a world Garden approach from a marketing perspective because now they get this large user base that they can start mapping and targeting them properly and potentially even building an app store

down the line but I think this is an interesting acquisition I don't know what to say there's two different angles and I think the path for woodoo seems to be IPO because their last raise was 200 million I think from Goldman Zachs in 2018 so they're kind of closing that line of an investment usually between 5 to seven years where investors are looking for some kind of a liquidation and for a company is of a size of a voodoo and and the way they've branched out it's unlikely that they could be a target for an acquisition so for them it's more of an IPO and in this sense it makes sense to me that they are becoming this massive mobile product portfolio company with apps and games and social networks Etc so that's my take that it makes sense from the valuation perspective now Chris please do explode oh my God I I don't even know where to begin on this this is like this is like PR 101 okay first of all the last round that these guys did at that $60 million round was

at a $700 million valuation okay so the only reason that they throw out this $500 million number which is complete [ __ ] [ __ ] right is that they want to save face from the investor base of B right and so reality of this was is likely a small cash portion maybe a third of the of the transaction and the rest is earnout so it was well below the last valuation round for this company right it's a fire sale fun Fally right on the positive side I did look it up they do have like 50 million Maus right that's a lot of [ __ ] I actually I'm surprised I thought this thing just came and went but according to Center Tower they have 50 million days and this is not like um you know Squad Busters where it's all in [ __ ] the Philippines and Brazil right these are actually us and European users so that's impressive but this is a fire sale like this is like yeah all hands on like the fact that they only got this

much is insane right and and that's also why they took over but I don't even necessarily believe in the underlying thesis that these users are going to be some like content Fortress thing where you're going to be able to cross sell amongst these users the games from Voodoo you know I don't know I don't think that's been Ru proven out at all frankly and and it doesn't create any type of advantage in this ecosystem that I can think of and maybe clearly the voodo guys are probably smarter than me but like this deal seems like desperation it seems like it's two French companies too which actually makes me very nervous right so like you know the French helping the French right let's say maybe they're buddies you know of with these guys I don't know but this seems like they're saving the company yeah I think this the the press release is not really indicating at all the situation in which B was in they were likely completely running out of money and they didn't have the ability to service their customers or service their platform for and so Voodoo is kind of

saving them from bankruptcy right and get maybe getting the investors somewhat whole yeah I'm just glad that voodo spends money on three camera shoots when Mishka comes to their office that we have amazing deconstructor of fun videos actually I got a lot of compliments on that they're like oo your deconstructor of fun interviews look fantastic I'm like that was Voodoo that wasn't us talking about woodoo like visiting them and having the conversation just seeing the office and and and talking to different people I'm very impressed how business focused they are like I I think I mentioned this in the podcast I didn't listen to my own podcast but but uh I don't know if I mentioned this but what was very interesting like as a small tidbit is like they don't have any sort of like logos anywhere except in the lobby downstairs where you see like Voodoo logo a small logo but there's nothing in the office there's no t-shirts like they don't seem like a typical gaming company and they say like no we're we're tech company we're Product Company so they are very very

smart in how they approach the business and it's hard for me to to kind of agree that this is just two French companies helping each other out like they wouldn't do that type of a thing they I they're just too smart for this and and they have a pretty broad app business that is growing so there might be something there that we're not seeing because we're only focused on that portfolio I challenged the voodoo folks to come on and tell me exactly how this is going to work and what the real deal was not like this 500 million [ __ ] that they threw out on press release [Music]