Can you fund a social media company like a video game?

The startup Yubo runs on in-app purchases.

September 30, 2020

When you boil it down, every social media giant makes money the same way: You click on content, and they serve you ads.

But a France-based social app wants to do it differently — and it’s taking inspiration from video games. Yubo ($19.5m raised) only makes money when users pay for small, in-app purchases called micro-transactions.

Yubo is just a bunch of chatrooms 

When you log in, all you see are chats hosted by total strangers. They’re grouped according to age, location, and theme.

You might have a chat for 18-year-old college freshmen or one for diehard Selling Sunset fans.

And that’s all there is to Yubo. The company hasn’t just ditched advertising — it’s said goodbye to likes, followers, and almost all metrics.

It’s not crazy to think this could work 

The video game example shows that kids are more than willing to toss out a few dollars to get in-app upgrades. Last year, micro-transactions brought in $1.8B for Fortnite alone.

Yubo has a ton of small charges: Pay $2, and you can send your chatroom to the top of the Yubo homepage for a few minutes.

So are people buying in? 

Not so much. Last year, Yubo brought in $10m in revenue — still a tiny sum compared to the billions raked in by Facebook or TikTok.

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