Elon Musk's banter with Robinhood CEO triggers stampede for Clubhouse app

[February 03, 2021]  By Jane Lanhee Lee, Elizabeth Culliford and Krystal Hu

(Reuters) - A surprise chat between tech billionaire Elon Musk and Robinhood CEO Vlad Tenev on new audio-based social network Clubhouse has helped propel the app to the top of the startup charts and sparked a scramble for invitations to the exclusive service.

The interaction between the two entrepreneurs on the platform on Sunday came amid intense interest in news around Robinhood, the online brokerage caught up in a wild stockmarket battle between retail investors and big Wall Street funds.

Demand for invitations to the less-than-a-year-old service -- members get to invite a limited number of friends during its pre-launch period -- is so hot, a market for them has grown on platforms like Reddit, eBay, and Craigslist.

In China, invitations are being sold on Alibaba's second-hand market place Idle Fish, even though Clubhouse isn't available in Apple's app store in that country.

In Japan investors, tech workers and the media have swarmed the service.

As of Tuesday, data analytics firm Sensor Tower said there were about 3.6 million installs worldwide for the app--only available on Apple's iPhone--with 1.1 million of them coming in the last six days.

Investors were so eager for a piece of the action that at one point on Monday they pushed up shares in Clubhouse Media Group, a completely unrelated stock, by 117%.

Chinese tech firm Agora Inc, listed on Nasdaq, saw its shares jump 30% on media reports that it may be a technology partner to Clubhouse. Agora declined to comment while a Clubhouse spokeswoman declined to comment on questions about technology partners.

The San Francisco-based company's latest round of financing in Jan. 24 valued the company at $1 billion, a source familiar with the matter said. The funding was led by Andreessen Horowitz, a leading Silicon Valley venture capital firm.

CLUBBY

Amid the buzz, Clubhouse has also drawn backlash from those who criticize the closed-door nature of chats like the one between Musk and Tenev.

Jessica Lessin, editor-in-chief of tech news outlet The Information tweeted that Marc Andreessen, a founding partner of Andreessen Horowitz, which also backs Robinhood, had blocked many reporters from listening in on Musk's talk.

SpaceX owner and Tesla CEO Elon Musk looks on after arriving on the red carpet for the Axel Springer award, in Berlin, Germany, December 1, 2020. REUTERS/Hannibal Hanschke/Pool

The chat between Musk and Tenev took place on a regular Clubhouse event called "The Good Time Show."

Andreessen Horowitz didn't reply to Reuters' request for comment on this issue.

However, Clubhouse CEO Paul Davidson told Bloomberg TV on Monday event hosts could choose who is allowed to listen, underscoring concerns about the clubby nature of the app.

Andreessen Horowitz separately said in a blog in January that it was launching new "media property," adding to its already active podcasting and blogging activities.

Clubhouse aspires to make the app widely available, and foresees business opportunities in subscriptions or tickets to events like the one Musk starred in.

It will have to contend with moderating the kind of site abuses, from hate speech to harassment, that major social media platforms face. Clubhouse has been criticized over reports of harassment and hate speech in its rooms, some of which are private and some public.

A spokeswoman for the app said it has already banned some individual users from the platform for violating its rules but declined to share more details.

The company has said it does not allow racism, hate speech, sexism and abuse on the network, though it says it does allow "general rudeness." It has said users who found clubs on the app will be able to set rules for their communities.

The Clubhouse spokeswoman said it currently has about 10 staff. The company has said it is investing in tools that detect and prevent abuse as well as features for users to moderate.

(Reporting By Jane Lanhee Lee in Las Vegas, Elizabeth Culliford and Krystal Hu in New York; Additional reporting by Shanghai Newsroom; editing by Kenneth Li, Jonathan Weber and Sam Holmes)

[© 2021 Thomson Reuters. All rights reserved.]

Copyright 2021 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.