Flipagram cuts deal with Universal Music, Sony Music, Warner Music, and more for clips, raises $70M Series B led by Sequoia; John Doerr, Mike Moritz join board
only then—will the centicorn be born. http://techcrunch.com/... http://twitter.com/... Mike Rundle / @flyosity : “It's Instagram for Flipboard. Or Flipboard for Instagram. I dunno, whatever gets us funded.” http://techcrunch.com/... Thanks: @drew See also Mediagazer
Context & Ripple Effects
In mid-2015, Flipagram solved the rights problem that had capped short-video apps: it struck licensing deals with Universal Music, Sony Music, and Warner Music so users could build clips on real catalog tracks, then raised a $70M Series B led by Sequoia with John Doerr and Mike Moritz taking board seats. The funding put it in the same consumer-content funding wave as Flipboard, which filed days later to raise another $50M (filed to raise another $50M).
What followed is the reason this deal matters in hindsight: within months of the round, Flipagram cut 20% of its staff despite the marquee board, then pivoted into a social network that failed to generate growth and went looking for a buyer — ending in a sale to Chinese news aggregator Toutiao, where it was promised independence.
First-order effects
- The three major labels gain a new licensed-clip revenue channel from user-generated video, while Flipagram gets legal access to their catalogs as its core differentiator.
- Sequoia's $70M lead and the addition of John Doerr and Mike Moritz to the board give Flipagram top-tier Silicon Valley backing at its peak valuation moment.
Second-order effects
- Rival short-video apps now face pressure to sign comparable label licensing or compete without music, raising the content-cost floor for the category.
- Flipagram's burn against an unclear monetization model forces the retrenchment seen in the later staff cuts and pivot, burning through the credibility of the blue-chip round.
Third-order effects
- Full-catalog licensing plus Sequoia-grade capital proved insufficient without distribution or engagement growth — pointing toward consolidation of underperforming consumer apps into acquirers like Toutiao seeking Western content assets.
- For the majors, the episode established that licensing fees alone don't make a platform partner viable; label deal flow to startups carries acquisition-risk pricing.
The trend: Consumer apps built on licensed media were learning that rights deals and elite venture backing buy time, not growth, as ownership migrated toward strategic buyers.