How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later
Mary Meisenzahl  Â
![How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later](/_next/image?url=https%3A%2F%2Fstaticbiassets.in%2Fthumb%2Fmsid-78833439%2Cwidth-700%2Cheight-525%2Cimgsize-173936%2Fhow-ill-fated-startup-quibi-went-from-raising-1-75-billion-before-launch-to-shutting-down-just-6-months-later.jpg&w=3840&q=75)
- Quibi just announced it was shutting down only six months after launching.
- The service's goal was to draw subscribers in to watch short mobile content on their phones.
- Quibi raised $1.75 billion but failed to attract subscribers.
Quibi is officially dead, after launching during the COVID-19 pandemic and surviving just six months. On Wednesday, the company announced that it was shutting down and informed employees that they would be laid off.
Quibi started out as an idea for short content on mobile devices from former eBay CEO Meg Whitman and DreamWorks cofounder Jeffrey Katzenberg. Long before launching, the streaming company had big Hollywood names attached, and raised $1.75 billion. It debuted in April during the pandemic, which Katzenberg blamed in part for the failure.
The platform had major investors, famous Silicon Valley and Hollywood names, and star power. Here's how it went from buzzy to defunct.
In August 2018, Jeffrey Katzenberg and Meg Whitman created NewTV, a digital video startup that aimed to create "snackable" short content for smartphones.
![In August 2018, Jeffrey Katzenberg and Meg Whitman created NewTV, a digital video startup that aimed to create "snackable" short content for smartphones.](https://staticbiassets.in/thumb/msid-78833595,width-700,height-525,imgsize-741213/in-august-2018-jeffrey-katzenberg-and-meg-whitman-created-newtv-a-digital-video-startup-that-aimed-to-create-quotsnackablequot-short-content-for-smartphones-.jpg)
Source: LA Times
That month, NewTV revealed it had secured $1 billion in funding from big names including Walt Disney, Warner Media, and Alibaba Group. At this point, no content had been announced.
![That month, NewTV revealed it had secured $1 billion in funding from big names including Walt Disney, Warner Media, and Alibaba Group. At this point, no content had been announced.](https://staticbiassets.in/thumb/msid-78833587,width-700,height-525,imgsize-216142/that-month-newtv-revealed-it-had-secured-1-billion-in-funding-from-big-names-including-walt-disney-warner-media-and-alibaba-group-at-this-point-no-content-had-been-announced-.jpg)
Source: LA Times
In October, they announced the service would be called Quibi, short for "quick bites." "Jeffrey can't stop saying the name Quibi," Whitman said. "I think that will be a fun name for us."
![In October, they announced the service would be called Quibi, short for "quick bites." "Jeffrey can](https://staticbiassets.in/thumb/msid-78833582,width-700,height-525,imgsize-513132/in-october-they-announced-the-service-would-be-called-quibi-short-for-quotquick-bites-quot-quotjeffrey-canapost-stop-saying-the-name-quibiquot-whitman-said-quoti-think-that-will-be-a-fun-name-for-us-quot.jpg)
Source: Deadline
Quibi signed a 10 year lease for an undisclosed amount for 49,000 square feet of office space in Hollywood.
![Quibi signed a 10 year lease for an undisclosed amount for 49,000 square feet of office space in Hollywood.](https://staticbiassets.in/thumb/msid-78833574,width-700,height-525,imgsize-2044347/quibi-signed-a-10-year-lease-for-an-undisclosed-amount-for-49000-square-feet-of-office-space-in-hollywood-.jpg)
Source: LA Times
By December, Katzenberg was already predicting launching as soon as 2019, with a two tier price system.
![By December, Katzenberg was already predicting launching as soon as 2019, with a two tier price system.](https://staticbiassets.in/thumb/msid-78833570,width-700,height-525,imgsize-755394/by-december-katzenberg-was-already-predicting-launching-as-soon-as-2019-with-a-two-tier-price-system-.jpg)
Source: LA Times
At that point, the company had 48 employees.
![At that point, the company had 48 employees.](https://staticbiassets.in/thumb/msid-78833568,width-700,height-525,imgsize-430978/at-that-point-the-company-had-48-employees-.jpg)
Source: LA Times
"We have one chance to launch and we need it to be absolutely perfect," Whitman said at a Variety summit.
!["We have one chance to launch and we need it to be absolutely perfect," Whitman said at a Variety summit.](https://staticbiassets.in/thumb/msid-78833562,width-700,height-525,imgsize-302848/quotwe-have-one-chance-to-launch-and-we-need-it-to-be-absolutely-perfectquot-whitman-said-at-a-variety-summit-.jpg)
Source: LA Times
In July 2019, BBC Studios announced it had invested in Quibi.
![In July 2019, BBC Studios announced it had invested in Quibi.](https://staticbiassets.in/thumb/msid-78833559,width-700,height-525,imgsize-30536/in-july-2019-bbc-studios-announced-it-had-invested-in-quibi-.jpg)
Source: Variety
So far, a Steven Spielberg horror short, an action series with Liam Hemsworth, and a remake of Punk'd had all been announced.
![So far, a Steven Spielberg horror short, an action series with Liam Hemsworth, and a remake of Punk](https://staticbiassets.in/thumb/msid-78833554,width-700,height-525,imgsize-136847/so-far-a-steven-spielberg-horror-short-an-action-series-with-liam-hemsworth-and-a-remake-of-punkaposd-had-all-been-announced-.jpg)
Source: Variety
In August 2019, a source told Business Insider that Quibi was on a "hiring rampage," poaching talent from Snap and Netflix.
![In August 2019, a source told Business Insider that Quibi was on a "hiring rampage," poaching talent from Snap and Netflix.](https://staticbiassets.in/thumb/msid-78833545,width-700,height-525,imgsize-242035/in-august-2019-a-source-told-business-insider-that-quibi-was-on-a-quothiring-rampagequot-poaching-talent-from-snap-and-netflix-.jpg)
Source: Business Insider
In October, Quibi announced that it had sold out $150 million in ads for its first year. Advertisers included Discover, Walmart, Taco Bell, and PepsiCo.
![In October, Quibi announced that it had sold out $150 million in ads for its first year. Advertisers included Discover, Walmart, Taco Bell, and PepsiCo.](https://staticbiassets.in/thumb/msid-78833540,width-700,height-525,imgsize-155548/in-october-quibi-announced-that-it-had-sold-out-150-million-in-ads-for-its-first-year-advertisers-included-discover-walmart-taco-bell-and-pepsico-.jpg)
Source: TechCrunch
Potential customers got their first look at Quibi in February 2020, when it became available for preorder in the App store.
![Potential customers got their first look at Quibi in February 2020, when it became available for preorder in the App store.](https://staticbiassets.in/thumb/msid-78833532,width-700,height-525,imgsize-287048/potential-customers-got-their-first-look-at-quibi-in-february-2020-when-it-became-available-for-preorder-in-the-app-store-.jpg)
Source: Business Insider
Quibi officially launched on April 6 for $4.99 per month with ads, or $7.99 without. It also offered a 90 day free trial.
![Quibi officially launched on April 6 for $4.99 per month with ads, or $7.99 without. It also offered a 90 day free trial.](https://staticbiassets.in/thumb/msid-78833526,width-700,height-525,imgsize-50991/quibi-officially-launched-on-april-6-for-4-99-per-month-with-ads-or-7-99-without-it-also-offered-a-90-day-free-trial-.jpg)
Quibi had 300,000 downloads on its first day, compared to four million on Disney Plus's launch a few months earlier. It rose to the number three spot in the App Store.
![Quibi had 300,000 downloads on its first day, compared to four million on Disney Plus](https://staticbiassets.in/thumb/msid-78833522,width-700,height-525,imgsize-392684/quibi-had-300000-downloads-on-its-first-day-compared-to-four-million-on-disney-plusaposs-launch-a-few-months-earlier-it-rose-to-the-number-three-spot-in-the-app-store-.jpg)
Source: SensorTower
Less than a week after launch, Whitman said that Quibi would eventually be available on TVs. She said that was "always" the plan but would be expedited because of coronavirus.
![Less than a week after launch, Whitman said that Quibi would eventually be available on TVs. She said that was "always" the plan but would be expedited because of coronavirus.](https://staticbiassets.in/thumb/msid-78833520,width-700,height-525,imgsize-242879/less-than-a-week-after-launch-whitman-said-that-quibi-would-eventually-be-available-on-tvs-she-said-that-was-quotalwaysquot-the-plan-but-would-be-expedited-because-of-coronavirus-.jpg)
Source: Business Insider
By April 16, Quibi had dropped out of the top 70 in the App Store, below Netflix, Hulu, and an ASMR slicing app. It remained in number 11 on the Google Play Store.
![By April 16, Quibi had dropped out of the top 70 in the App Store, below Netflix, Hulu, and an ASMR slicing app. It remained in number 11 on the Google Play Store.](https://staticbiassets.in/thumb/msid-78833514,width-700,height-525,imgsize-87790/by-april-16-quibi-had-dropped-out-of-the-top-70-in-the-app-store-below-netflix-hulu-and-an-asmr-slicing-app-it-remained-in-number-11-on-the-google-play-store-.jpg)
Source: Business Insider
In May, with 3.5 million downloads, Katzenberg told The New York Times that the coronavirus was responsible for "everything that has gone wrong" with the app.
![In May, with 3.5 million downloads, Katzenberg told The New York Times that the coronavirus was responsible for "everything that has gone wrong" with the app.](https://staticbiassets.in/thumb/msid-78833510,width-700,height-525,imgsize-327248/in-may-with-3-5-million-downloads-katzenberg-told-the-new-york-times-that-the-coronavirus-was-responsible-for-quoteverything-that-has-gone-wrongquot-with-the-app-.jpg)
Source: The New York Times
This statement was at odds with other streaming services. Netflix and Disney Plus saw booms during the pandemic.
![This statement was at odds with other streaming services. Netflix and Disney Plus saw booms during the pandemic.](https://staticbiassets.in/thumb/msid-78833503,width-700,height-525,imgsize-367713/this-statement-was-at-odds-with-other-streaming-services-netflix-and-disney-plus-saw-booms-during-the-pandemic-.jpg)
Source: Business Insider
By June, Quibi was asking executives to take voluntary pay cuts, and considering laying off 10% of its 250 employees.
![By June, Quibi was asking executives to take voluntary pay cuts, and considering laying off 10% of its 250 employees.](https://staticbiassets.in/thumb/msid-78833499,width-700,height-525,imgsize-332586/by-june-quibi-was-asking-executives-to-take-voluntary-pay-cuts-and-considering-laying-off-10-of-its-250-employees-.jpg)
Source: The Wall Street Journal
As the first 90 day free trials expired in the summer, The Verge reported that only about eight percent converted into paid subscribers.
![As the first 90 day free trials expired in the summer, The Verge reported that only about eight percent converted into paid subscribers.](https://staticbiassets.in/thumb/msid-78833491,width-700,height-525,imgsize-1106384/as-the-first-90-day-free-trials-expired-in-the-summer-the-verge-reported-that-only-about-eight-percent-converted-into-paid-subscribers-.jpg)
Source: The Verge
In July, Quibi started paying bloggers to write about its shows.
![In July, Quibi started paying bloggers to write about its shows.](https://staticbiassets.in/thumb/msid-78833488,width-700,height-525,imgsize-271080/in-july-quibi-started-paying-bloggers-to-write-about-its-shows-.jpg)
Source: Business Insider
Recode reported that Quibi was unsuccessfully searching for a buyer, and exploring other options to raise money in September.
![Recode reported that Quibi was unsuccessfully searching for a buyer, and exploring other options to raise money in September.](https://staticbiassets.in/thumb/msid-78833483,width-700,height-525,imgsize-412134/recode-reported-that-quibi-was-unsuccessfully-searching-for-a-buyer-and-exploring-other-options-to-raise-money-in-september-.jpg)
Source: Recode
In October, The Wall Street Journal first reported that Quibi was shutting down after just six months.
![In October, The Wall Street Journal first reported that Quibi was shutting down after just six months.](https://staticbiassets.in/thumb/msid-78833481,width-700,height-525,imgsize-75512/in-october-the-wall-street-journal-first-reported-that-quibi-was-shutting-down-after-just-six-months-.jpg)
Source: The Wall Street Journal
Katzenberg and Whitman wrote a letter to investors and employees saying that the company failed because of the pandemic, and because the idea wasn't strong enough.
![Katzenberg and Whitman wrote a letter to investors and employees saying that the company failed because of the pandemic, and because the idea wasn](https://staticbiassets.in/thumb/msid-78833478,width-700,height-525,imgsize-137233/katzenberg-and-whitman-wrote-a-letter-to-investors-and-employees-saying-that-the-company-failed-because-of-the-pandemic-and-because-the-idea-wasnapost-strong-enough-.jpg)
Source: Business Insider
On a Wednesday call telling employees they would be laid off, Katzenberg told them to listen to the song "Get Back Up Again" from the movie "Trolls" to help lift their spirits.
![On a Wednesday call telling employees they would be laid off, Katzenberg told them to listen to the song "Get Back Up Again" from the movie "Trolls" to help lift their spirits.](https://staticbiassets.in/thumb/msid-78833471,width-700,height-525,imgsize-46412/on-a-wednesday-call-telling-employees-they-would-be-laid-off-katzenberg-told-them-to-listen-to-the-song-quotget-back-up-againquot-from-the-movie-quottrollsquot-to-help-lift-their-spirits-.jpg)
Source: Business Insider
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