Subscription newsletter platform kingpin Substack announced today that they have acquired the Cocoon team, a subscription social networking app designed for close friends.
Lerer Hippeau, a Y Combinator-backed startup, led a $3 million seed round. This was just before the outbreak of the flu that changed the way people use social media to connect with their closest and most dear ones. Cocoon's original pitch was to create a social network that your closest friends could use. Over time, Cocoon refined its platform dynamics to allow users to build more flexible social networks that they could adjust at their own pace. The app allows users to share photos and text updates, as well passive data such as mobile location data or fitness stats. This allows them to automatically update Slack channels-like feeds with updates for certain groups of friends.
Sachin Monga, Alex Cornell and Alex Cornell co-founded the app. They met while working in product roles at Facebook.
Cocoon, unlike many other apps, didn't rely on user data or advertising to monetize. Instead, they pushed users to purchase a $4 per month subscription. Substack won't acquire the Cocoon app. Instead, they will be continuing to operate the app independently. Substack's recent efforts to build community for their newsletter writers makes it easy to see why they are looking for more talent in this space to improve the platform's functionality.
The startup announced in March that it had closed a Series B of $65 million at a $650m valuation. This is to help them bolster their cash reserves as they try to define a space with more attention. Both Twitter and Facebook have released newsletter products this year. Over the past few months, theyve been buying up smaller startups. They announced earlier this month that they had purchased the debate platform Letter for an undisclosed amount. They acquired the team from People & Company, a community-building startup.
Update: An earlier version of this story stated that Cocoon would cease to be available after acquisition. It will now operate independently.
