October 31, 2023

How to Buy Clubhouse Stock

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Want to invest in Clubhouse stock? Although it isn't publicly traded yet, there may a few ways to indirectly invest in the company.

Clubhouse went from a $100 million to a $4 billion valuation in just less than a year. They've also attracted some big-name investors. This is interesting to a lot of investors, despite it still being a private company.

The good news is that you don't have to wait for Clubhouse to go public to invest in it. There are a few ways to get exposure in the company.

Read on to find out how you can invest in Clubhouse.

How do I invest in Clubhouse stock?
You cannot invest in Clubhouse stock because it is not a public company. This means that its shares are not traded on a stock exchange. To invest in a private company, you need to be an accredited investor.

Can You Buy Clubhouse Stock?

No, you cannot buy Clubhouse stock at this time. Clubhouse is a privately held company and is not yet publicly traded. This means its shares are not available on a stock exchange.

If you're looking to invest in Clubhouse, there are a few alternative routes you can take before the company goes public.

Clubhouse App and Clubhouse Media are not the same.
  • Clubhouse App is a social media platform where users can join and host live audio conversations on various topics. It is a privately held company founded in 2019.
  • Clubhouse Media is a talent management company representing content creators and influencers. It is a publicly traded company founded in 2014.

Would you be interested in investing in Clubhouse if it became publicly traded?

How to buy Clubhouse before the IPO Date

There are a few secondary platforms where you can buy Clubhouse stock.

A secondary platform like Equitybee and Forge Global is where accredited investors can invest in private companies. This means that you can invest in Clubhouse stock before it goes public.

Here's how to access secondary platforms:

  1. Sign up online with your chosen platform (Example: Equitybee)
  2. Undergo verification of your accreditation
  3. Once verified, you can browse available offerings
  4. Fund your account and buy shares

Remember that requirements may differ among platforms. The minimum investment is also pretty high (for example, Equitybee requires a $10,000 minimum).[1]

Another way to buy Clubhouse stock pre-IPO is through private placement through platforms like Forge Global and UpMarket. These platforms allow you to browse investment opportunities and connect with accredited investors.

It is important to note that investing in a private company is a high-risk investment. There is no guarantee that Clubhouse will go public or that its stock price will go up.

What is private placement?
Private placement is a process where accredited investors can buy shares of a private company before it goes public. To be an accredited investor, you must meet certain requirements like having an average yearly income of $200k or working in the financial industry.[2]

How do you feel about indirectly investing in startups through their parent or partner companies?

Why Invest in Clubhouse?

Clubhouse is a social audio app that has quickly become one of the trending tech startups in the world. Here are a few reasons why you should invest in Clubhouse:

  • Engaged user base
    The average Clubhouse user spends 1 hour and 50 minutes daily on the app. This is significantly longer than the average time spent on other social media platforms, such as X (formerly Twitter) at 34 minutes per day and Facebook at 35 minutes per day.

  • Unique and valuable content
    Clubhouse allows users to listen to and participate in live audio conversations about various topics. This includes business, technology, culture, entertainment, and more. They've even attracted high-profile users like celebrities, business leaders, and politicians.

  • Large and growing market
    Social media usage worldwide is projected to reach nearly 6 billion users by 2027.[3] Given its rapid growth and popularity, the Clubhouse is well-positioned to capture a significant market share.

However, it is important to note that Clubhouse also has risks. Consider also other factors that may affect Clubhouse's stock performance.

Even if Clubhouse were to go public in the future, it would still be a risky investment. Clubhouse is a relatively new company with a limited track record. It is also facing increasing competition from other social media platforms, such as Spotify.

Who owns Clubhouse?
Clubhouse is a social media startup founded by Paul Davison and Rohan Seth in 2019. It was originally designed for podcasts under the name Talkshow. But in March 2020, it was rebranded as Clubhouse and officially released for iOS.

What factors would you consider before deciding to invest in Clubhouse stock or similar entities?

Risks in buying Clubhouse stock

Here are some risks in buying Clubhouse stock:

  • Competition from other social media platforms
    Clubhouse faces competition from other established social media platforms. X (formerly Twitter), Facebook, and Spotify also develop their own audio features. This could reduce Clubhouse's market share and make it difficult to retain users.

  • Moderation challenges
    Clubhouse has been criticized for how it handles moderation. Some users say that hate speech and misinformation are all over the platform. This could lead to the government getting involved and damaging Clubhouse's reputation.

  • User growth slowdown
    Clubhouse's user growth has slowed in recent months. It raises concerns that the app may be losing its appeal or the company is facing increasing competition.

  • Lack of monetization
    Clubhouse has not yet announced any plans to monetize its platform. This could limit its potential revenue and profitability.

You should carefully consider all risks before investing in Clubhouse stock. Additionally, you should take a look at their current valuation to see how it's performing.

Can I buy a single Clubhouse stock?
Investors cannot buy Clubhouse stock because it is a private company.

What is Clubhouse's valuation?

Clubhouse's valuation reached $4 billion in 2021 with no official updates after.[4] However, many experts thought this was too high. Here are two reasons why:

  • Clubhouse grew too quickly
    Investors were eager to invest in tech companies during the pandemic. However, the market cooled down in late 2021, and Clubhouse's valuation fell with it.

    Andreessen Horowitz invested $1 billion in the company in early 2021, up from $100 million just six months earlier. Three months later, Tiger Global and DST Global invested in Clubhouse, pushing its valuation to $4 billion.

  • Clubhouse's popularity declined and stayed unprofitable
    Clubhouse had a lot of users, but it didn't have a clear revenue model. Its growth had stalled even before the company could establish a profitable business model. The company recently laid off 50% of its workforce to reset.

Despite its challenges, Clubhouse remains popular with many users. The company is now working on new features and ways to make money. However, other similar platforms are already performing well and could be a good alternative to Clubhouse.

Is Clubhouse a good stock to buy?
No. Currently, there are no Clubhouse stocks because it isn't a public company. This means its shares aren't traded on stock exchanges and cannot be bought by individual investors.

Alternatives to Clubhouse Stock

If you're unsure about investing in Clubhouse stock, Discord and Spotify could be good alternatives. They have more users, more ways to make money, and more established.

Here are some of the benefits of investing in these companies over Clubhouse stock:

  1. Spotify
    Spotify is a digital music, video, and podcast service that gives you access to a library of millions of songs and other content. They have 574 million users[5] while Clubhouse has 10 million.[6]

    Spotify makes money from subscriptions, advertising, and other sources. Clubhouse mostly makes their money from advertising.

    Spotify is also investing in other features like podcasts, audiobooks, and live events. This could help it grow even more in the future. If you're looking to invest, its stock is traded on the New York Stock Exchange (NYSE) under the ticker symbol "SPOT".

  2. Discord
    Discord is a chat platform that is popular among gamers. It has over 150 million active users.[7] They're known for its high-quality audio and video chat, which makes it a good fit for the audio chat market. It generates revenue from subscriptions, paid server boosting perks, and other sources.

    Although Discord isn't publicly traded yet, it's expected to go public in 2023. It's reported to be considering a direct listing on the NASDAQ stock exchange.

Bottom Line

While Clubhouse isn't yet publicly traded, there could be a few indirect ways to get your hands in their stock. These include investing in a venture capital fund that has invested in Clubhouse or investing in a thematic ETF that focuses on the social media sector.

Just remember to do your own research before investing in any company. Also, be aware of the risks involved in investing in a private company.

References

  1. ^ Equitybee. The investment process, Retrieved 10/22/2023
  2. ^ U.S Securities and Exchange Commission. Accredited Investor, Retrieved 09/28/2023
  3. ^ Demand Sage. Social Media Users Global Demographics (2023), Retrieved 10/22/2023
  4. ^ Reuters. Clubhouse closes new round of funding that would value app at $4 billion , Retrieved 10/22/2023
  5. ^ Spotify. About Spotify, Retrieved 10/22/2023
  6. ^ Influencer Marketing Hub. Clubhouse Statistics: Revenue, Users and More (2023), Retrieved 10/22/2023
  7. ^ Discord. About Discord, Retrieved 10/22/2023

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