|Girish Shetti |||Feb 01, 2017 10:19 AM EST|
(Photo : Getty Images. ) Chinese news aggregator app Toutiao has bought video creation app 'Flipagram' for an undisclosed amount. Both companies were engaged in acquisition talks for several months.
The video creation app Flipagram, which was once considered a serious threat to Instagram, has been acquired by Chinese news aggregator app 'Toutiao.' The financial details of the deal are still not known.
Flipagram founder Farah Mohit has termed the acquisition as a perfect match and claimed that the company will continue to operate as an independent entity, while the address of its headquarter office in Los Angeles will remain unchanged.
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As for Toutiao, this acquisition will open the door to increase its footprints in United States, a key market from where the company is hoping to bolster its profit in coming years.
According to reports, both companies were pursuing the acquisition talks for several months.
Flipagram was founded in 2013 as an app that seamless combines photos, videos and background music into one beautiful montage. The app clearly stood out from its main competitor Instagram that mainly dealt with still photos.
Owing to its unique USP, Flipagram managed to create huge buzz in the market that helped in propelling the app download numbers. According to rough estimate, the company roughly boosts 36 million active users. Mohit claims that its user base today creates 10 million videos per month.
But these impressive numbers were not good enough to save the company from financial crisis, as the funds began to dry up and investors were not ready to invest fresh cash into the business.
The company boosts high profile investors like Sequoia, Kleiner Perkins, Caufield & Byers and Index Ventures. Apparently, these investors had put around $70 million in the start-up firm in 2015.
According to some former employees, morale in the Flipagram office has been running low for several months now, with several employees quitting the firm abruptly.
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