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How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later

How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later
  • 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.

Read more: A Quibi investor says the startup should have tried to 'fight more' but that he'll be happy if he can get 50% of his investment back

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.
Meg Whitman and Jeffrey Katzenberg. Stefanie Keenan/Getty Images for The Hollywood Reporter

Source: LA Times

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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.
Alibaba. Feature China/Barcroft Media via Getty Images

Source: LA Times

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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't stop saying the name Quibi," Whitman said. "I think that will be a fun name for us."
Quibi CEO Meg Whitman speaks about the short-form video streaming service for mobile Quibi during a keynote address January 8, 2020 at the 2020 Consumer Electronics Show (CES) in Las Vegas, Nevada. Robyn Beck/Getty Images

Source: Deadline

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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.
Hollywood Boulevard. REUTERS/Lucy Nicholson

Source: LA Times

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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.
Jeffrey Katzenberg. Daniel Boczarski/Getty Images for Quibi

Source: LA Times

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At that point, the company had 48 employees.

At that point, the company had 48 employees.
Jeffrey Katzenberg speaking at CES 2020. Robyn Beck/AFP via Getty Images

Source: LA Times

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"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.
Reuters/Mike Blake

Source: LA Times

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In July 2019, BBC Studios announced it had invested in Quibi.

In July 2019, BBC Studios announced it had invested in Quibi.
The main entrance to the BBC headquarters and studios in Portland Place, London. Thomson Reuters

Source: Variety

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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'd had all been announced.
Christopher Columbus ended up directing "The Sorcerer's Stone." AP Images

Source: Variety

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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.
Early price indications on Snap Portia Crowe/Business Insider
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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.
Pepsi

Source: TechCrunch

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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.
ROBYN BECK/Contributor/Getty Images

Source: Business Insider

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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.
Quibi/Bryan Pietsch
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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's launch a few months earlier. It rose to the number three spot in the App Store.
Quibi CEO Meg Whitman speaks during a Quibi keynote address at the 2020 CES in Las Vegas Reuters

Source: SensorTower

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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.
Still from "Chrissy's Court" on Quibi. Quibi
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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.
Shayanne Gal/Business Insider

Source: Business Insider

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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.
Quibi founder Jeffrey Katzenberg speaks during a Quibi keynote address at the 2020 CES in Las Vegas Reuters
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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.
Anadolu Agency/Getty Images

Source: Business Insider

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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.
Quibi CEO Meg Whitman and cofounder Jeffrey Katzenberg. Kevork S. Djansezian/Getty Images
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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.
A demonstration of Quibi's Turnstyle feature at CES in January 2020. Denise Truscello/Getty Images for Quibi

Source: The Verge

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In July, Quibi started paying bloggers to write about its shows.

In July, Quibi started paying bloggers to write about its shows.
Paige Leskin/Business Insider

Source: Business Insider

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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.
Sophie Turner stars in "Survive" on Quibi. Quibi

Source: Recode

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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.
Earl Gibson III/Getty Images

Source: The Wall Street Journal

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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't strong enough.
Quibi CEO Meg Whitman and cofounder Jeffrey Katzenberg. Richard Bord/Getty Images for Cannes Lions
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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.
"Trolls." 20th Century Fox
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