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Monday Brief
Iniobong Uyah & Alex Christidis
January 20, 2025
Still on TikTok Ban: Another Chinese App “RedNote” Steals the spotlight
In our last publication, we mentioned Rednote as one of the apps set to replace TikTok. According to Exploding Topic searches related to Rednote increased by 100% in the last 3 months. Not surprising as the app also known as Little Red Book is considered by many people a crossbreed of popular social media like Instagram, TikTok, and Pinterest, making it a haven for younger users searching for a new app to call home. Of the more than half a billion new signups, the majority are Gen Z who make up about 39.21% of RedNote users. The influx of US users may transform the platform which has been heavily dominated by female users. Also, RedNote’s previous valuation of 17 billion dollars is expected to increase along with its earnings.
But Why RedNote?
Could this be a form of digital protest against the TikTok ban? This is a developing narrative and it may not be far from the truth. If you know the backstory behind the ban on TikTok, then you will know that its “rumored” involvement with the Chinese government (which has long been denied by TikTok parent company ByteDance) has a role to play. Whether this is true or not is the least concern of TikTok users who believe their freedom of speech is being denied.
Financial impact:
TikTok generated over 1 Billion dollars in monthly revenue for its users. Businesses that relied heavily on the platform for additional income will be most affected by the ban. Aside from financial losses, there’s also the learning curve. Understanding RedNote’s algorithms, what works and what doesn't, building brand image, growing followers, and so on. These are just a few challenges that lie ahead.
The Future of TikTok in the US remains a mystery.
Everything depends on the President-elect Donald Trump. Perhaps something can be done to lift the ban. Trump has been a major proponent of TikTok’s ban but in an interview with NBC, the President said he will “most likely” issue an executive order delaying the ban for 90 days. How he will do this and the outcome of the reprieve is still unknown at the moment.
Stats from Exploding Topics
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Biggest funding rounds this week
Scale AI | A San Francisco company that helps organize and label data for artificial intelligence systems raised $1 billion in funding that was led by Accel. The company at $13.8 billion. Big names like Nvidia, Meta, and Amazon are also investors. |
AltruBio | This biotech company in San Francisco raised $225 million to support its research into treatments for immune diseases like ulcerative colitis. The funding will help with Phase 2 trials. |
Farcaster: | A social media platform built on Web3 technology received $150 million from Paradigm. They plan to use the money to grow their user base and add new features for developers. |
Suno | A startup from Cambridge, Massachusetts, that lets users create songs using simple text instructions, raised $125 million. The funding round included Lightspeed Venture Partners and others. |
Progentos Therapeutics | A biotech company in Watertown, Massachusetts, received $65 million to develop treatments for multiple sclerosis, a condition affecting millions. The funding was led by Forbion Capital Partners. |
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Interesting Read: Like Bananas, Most Unicorn Startups Peak When Underripe
Summary
Startups are often compared to bananas—they’re most appealing before reaching full maturity. Investors are drawn to their potential, leading to sky-high early valuations, even before their business models stabilize. Take Uber, which hit a $40 billion valuation in 2014 despite operational challenges, or Robinhood, which went public at $32 billion but later faced market fluctuations. Entire sectors also peak early—platforms like Clubhouse and Hopin soared during the pandemic but lost momentum as trends shifted. Long-term success remains rare. Companies like Rivian and Coursera still operate but haven’t regained their early buzz. Startups must look beyond short-term hype, focusing on sustainable growth and consistent value to thrive in the long run.
Is the focus on quick peaks hurting startups, or is it just the reality of the market?
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Until next time, Best Regards.
Alex