Business

These 2 secret-sharing apps just pulled in funding in the same week

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Whisper and Secret, both apps that let people share secrets anonymously, are reportedly raising $30 million and $10 million respectively.

The news on Whisper’s round was originally reported by Re/code. Citing an anonymous source, Re/code claimed that the app was valued at a massive $200 million, and the round was led by Shasta Ventures. In its previous round of funding, Whisper raised $21 million from Silicon Valley venture firms like Sequoia Capital and Lightspeed Venture Capital.

Meanwhile Secret, the app developed by former Google employees with the tagline “Speak Freely,” closed $10 million in funding from Google Ventures, TechCrunch reports.

The premise for both apps is similar: It’s all about sharing secrets anonymously. Business Insider recently published a detailed report on the distinctions between the two apps: Notably, on Whisper, you can share with anyone, but on Secret, you’re sharing with folks in your network. Whisper is the more mature app with a larger base of users, having launched in 2012, while Secret emerged from stealth mode just a few months ago. Secret is still most popular with early adopters, the Silicon Valley insider set (in my limited time with the app, this group seems dead-set on taking cheap shots at Path founder Dave Morin).

In my opinion, the differences are minimal. It’s not yet clear whether both companies can capture a significant share of the market or if we’ll see a winner in the space.

Positivity versus growth

The founders of these apps will face an important test as they continue to scale. How can they avoid cyber-bullying, especially if teens and college students get hooked? Can they avoid becoming the next Juicy Campus?

I recently caught up with Juicy Campus founder Matt Ivestor, who is now working on an app called Kindr. Ivestor started Juicy Campus, an anonymous message board for college students, shortly after graduating from Duke. He had intended to create an anonymous social network for teens to share ideas, concerns, and insidery jokes. But Juicy Campus morphed into a hotbed for cruel gossip and vicious cyber-bullying. It was ultimately shut down after numerous investigations by the attorneys general offices in Connecticut and New Jersey.

Ivestor, who has written a book about online reputation management and cyber-bullying, praised Whisper for resisting the temptation to grow too quickly. “Whisper has created a community that allows people to bond and be vulnerable,” he said. “Anonymity can be very dangerous, but the team has cultivated some of the more positive aspects.”

Disclosure: I helped edit Ivestor’s book after graduating from Stanford Journalism School. 

With both apps reportedly taking on significant new investment, the founders may find themselves under increasing pressure to reach younger audiences. Silicon Valley may seem like a gossip hub — but it’s nothing compared to the challenge of policing an anonymous community of high school students.

Venture capitalists often make the claim that they support founders’ best interests, but they are also looking for a speedy return on investment. If Whisper and Secret’s team don’t take the time to closely monitor and moderate the content, the outcome could be disastrous.

“If these apps are willing to forfeit growth for positivity, then that’s great,” said Ivestor. “But that still remains to be seen.”


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