How To Invest In Clubhouse? 👋
Clubhouse is private but how can you take advantage of their growth?
I am sure many of you reading this must have reflected on the amount of time you spend on this new social app called Clubhouse. I certainly had to take a step back because of how many hours I spend on there each day. If you don’t know what Clubhouse is I recommend clicking here.
Clubhouse is blowing up! They have over 5M users and are continuing to grow. Just last week they added 1M users because of Elon Musk’s guest appearance.
On top of that, Clubhouse is becoming incredibly popular in China! How long it can last there is still up in the air but for now a lot of China’s elite are flocking to the app. Clubhouse invite codes were even trending on Weibo, the Chinese social media platform. More info here.
After using Clubhouse for a few weeks and seeing how much I loved the experience, I started thinking about how to invest in this company. Unfortunately, Clubhouse is a private company so we can’t just go and buy their stock. Instead, I started thinking about which cloud services Clubhouse could be using to store data, host servers, and most importantly what they use for their voice comms.
I opened up my laptop, connected my iPhone and started monitoring Clubhouse traffic. I won’t go into the details but here is what I found. They use a lot of services but I'll only talk about the public companies.
Amazon AWS $AMZN
This isn’t much of a surprise since everyone is using AWS these days. From my research, Clubhouse is using AWS S3 to store their data like profile photos etc. I doubt Clubhouse spend is big enough to make a noticeable difference in AWS revenue.
Agora $API
Clubhouse seems to be using Agora for their real-time voice communications. Now the great thing about Agora is that they charge by the minute. The current rate is $0.99/1000 minutes. Here is a chart showing potential revenue for Agora. This is all highly speculative but gives a good idea.
I think the potential here is great. Clubhouse will continue to grow and that will mean more revenue for Agora. Beyond that, this will put Agora on the map. With COVID there is a bigger need for real-time comms APIs than ever before. So if Agora can handle Clubhouse then they will definitely be a great option for other companies. There is the possibility that Clubhouse stops using Agora so please consider that risk if you decide to invest.
The stock has seen a recent bump because of their relationship with Clubhouse so it’s trading at a premium.
Cloudflare $NET
Cloudflare is one of my favorite technology companies. They offer a wide range of services from CDNs to DDoS prevention. From my research I saw that the Clubhouse API is hosted on Cloudflare. Unfortunately I can’t make any estimates on how much Clubhouse can contribute to Cloudflare’s revenues but I think it’s reasonable to conclude that Cloudflare will see some benefit from Clubhouse’s continued growth and success.
Disclosure: The opinions expressed herein are my current views as of February 6, 2021, and may change without notice for any reason including as subsequent conditions evolve. All data contained here was sourced from information publicly available. Actual results could differ materially and are subject to inherent risks and uncertainties. These perspectives contained herein are my personal views only, and are not and should not be considered solicitation or recommendation to purchase or sell any security. You should do your own due diligence and reach independent conclusions prior to making an investment decisions.
The author of this post, as of Feb 6, 2021, owns shares of Amazon.com, Inc.