Square Said to Acquire Team From Struggling Social App Yik YakBy
Company pays less than $3 million for small team of engineers
The deal is a sign of the once high-flying app’s decline
Square Inc. acquired the engineering team of Yik Yak, according to a person familiar with the matter, marking the decline of the once-popular anonymous social network.
The payments processor paid less than $3 million for between five and ten of Yik Yak’s engineers, according to the person. Atlanta-based Yik Yak’s Chief Executive Officer Tyler Droll will not join Square, the person added, asking not to be identified talking about a private matter.
Square declined to comment on the deal and Yik Yak didn’t respond to a request for comment.
Square, led by Twitter Inc. co-founder Jack Dorsey, has made acquisitions in recent years to expand into loans, food delivery, and software services. Square made its largest purchase in 2014 when it bought food-delivery startup Caviar.
Atlanta-based Yik Yak, which started in 2013, created a smartphone app that allowed people to contribute to anonymous chat groups in a narrow geographical radius -- like college campuses. The app exploded in popularity and quickly climbed the App Store rankings, garnering attention from investors. Yik Yak raised about $75 million in funding, a large portion of which came from Sequoia Capital in late 2014, valuing the startup at about $400 million, according to PitchBook Data Inc. The app has since fallen out of the top 100 social networking sites in the U.S., with about 57,000 daily active users across the iOS App Store and Google Play, according to data from Apptopia Inc.
The company’s reputation suffered from cases of cyber-harassment, hate speech, and threats that appeared on Yik Yak’s platform. A coalition of women’s groups asked the Department of Education in 2015 to do more to protect students from harassment on Yik Yak. The site became a point of contention on campuses across the country, with many universities debating banning it. Late last year, the startup reportedly cut 60 percent of employees amid slowing growth.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.