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How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later

How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later

Mary Meisenzahl

Rafapress/Shutterstock

Quibi just announced it was shutting down only six months after launching.
The service's goal was to draw subscribers in to watch short mobile content on their phones.
Quibi raised $1.75 billion but failed to attract subscribers.

Quibi is officially dead, after launching during the COVID-19 pandemic and surviving just six months. On Wednesday, the company announced that it was shutting down and informed employees that they would be laid off.

Quibi started out as an idea for short content on mobile devices from former eBay CEO Meg Whitman and DreamWorks cofounder Jeffrey Katzenberg. Long before launching, the streaming company had big Hollywood names attached, and raised $1.75 billion. It debuted in April during the pandemic, which Katzenberg blamed in part for the failure.

The platform had major investors, famous Silicon Valley and Hollywood names, and star power. Here's how it went from buzzy to defunct.

In August 2018, Jeffrey Katzenberg and Meg Whitman created NewTV, a digital video startup that aimed to create "snackable" short content for smartphones.

Meg Whitman and Jeffrey Katzenberg. Stefanie Keenan/Getty Images for The Hollywood Reporter

Source: LA Times

That month, NewTV revealed it had secured $1 billion in funding from big names including Walt Disney, Warner Media, and Alibaba Group. At this point, no content had been announced.

Alibaba. Feature China/Barcroft Media via Getty Images

Source: LA Times

In October, they announced the service would be called Quibi, short for "quick bites." "Jeffrey can't stop saying the name Quibi," Whitman said. "I think that will be a fun name for us."

Quibi CEO Meg Whitman speaks about the short-form video streaming service for mobile Quibi during a keynote address January 8, 2020 at the 2020 Consumer Electronics Show (CES) in Las Vegas, Nevada. Robyn Beck/Getty Images

Source: Deadline

Quibi signed a 10 year lease for an undisclosed amount for 49,000 square feet of office space in Hollywood.

Hollywood Boulevard. REUTERS/Lucy Nicholson

Source: LA Times

By December, Katzenberg was already predicting launching as soon as 2019, with a two tier price system.

Jeffrey Katzenberg. Daniel Boczarski/Getty Images for Quibi

Source: LA Times

At that point, the company had 48 employees.

Jeffrey Katzenberg speaking at CES 2020. Robyn Beck/AFP via Getty Images

Source: LA Times

"We have one chance to launch and we need it to be absolutely perfect," Whitman said at a Variety summit.

Reuters/Mike Blake

Source: LA Times

In July 2019, BBC Studios announced it had invested in Quibi.

The main entrance to the BBC headquarters and studios in Portland Place, London. Thomson Reuters

Source: Variety

So far, a Steven Spielberg horror short, an action series with Liam Hemsworth, and a remake of Punk'd had all been announced.

Christopher Columbus ended up directing "The Sorcerer's Stone." AP Images

Source: Variety

In August 2019, a source told Business Insider that Quibi was on a "hiring rampage," poaching talent from Snap and Netflix.

Early price indications on Snap Portia Crowe/Business Insider

Source: Business Insider

In October, Quibi announced that it had sold out $150 million in ads for its first year. Advertisers included Discover, Walmart, Taco Bell, and PepsiCo.

Pepsi

Source: TechCrunch

Potential customers got their first look at Quibi in February 2020, when it became available for preorder in the App store.

ROBYN BECK/Contributor/Getty Images

Source: Business Insider

Quibi officially launched on April 6 for $4.99 per month with ads, or $7.99 without. It also offered a 90 day free trial.

Quibi/Bryan Pietsch

Quibi had 300,000 downloads on its first day, compared to four million on Disney Plus's launch a few months earlier. It rose to the number three spot in the App Store.

Quibi CEO Meg Whitman speaks during a Quibi keynote address at the 2020 CES in Las Vegas Reuters

Source: SensorTower

Less than a week after launch, Whitman said that Quibi would eventually be available on TVs. She said that was "always" the plan but would be expedited because of coronavirus.

Still from "Chrissy's Court" on Quibi. Quibi

Source: Business Insider

By April 16, Quibi had dropped out of the top 70 in the App Store, below Netflix, Hulu, and an ASMR slicing app. It remained in number 11 on the Google Play Store.

Shayanne Gal/Business Insider

Source: Business Insider

In May, with 3.5 million downloads, Katzenberg told The New York Times that the coronavirus was responsible for "everything that has gone wrong" with the app.

Quibi founder Jeffrey Katzenberg speaks during a Quibi keynote address at the 2020 CES in Las Vegas Reuters

Source: The New York Times

This statement was at odds with other streaming services. Netflix and Disney Plus saw booms during the pandemic.

Anadolu Agency/Getty Images

Source: Business Insider

By June, Quibi was asking executives to take voluntary pay cuts, and considering laying off 10% of its 250 employees.

Quibi CEO Meg Whitman and cofounder Jeffrey Katzenberg. Kevork S. Djansezian/Getty Images

Source: The Wall Street Journal

As the first 90 day free trials expired in the summer, The Verge reported that only about eight percent converted into paid subscribers.

A demonstration of Quibi's Turnstyle feature at CES in January 2020. Denise Truscello/Getty Images for Quibi

Source: The Verge

In July, Quibi started paying bloggers to write about its shows.

Paige Leskin/Business Insider

Source: Business Insider

Recode reported that Quibi was unsuccessfully searching for a buyer, and exploring other options to raise money in September.

Sophie Turner stars in "Survive" on Quibi. Quibi

Source: Recode

In October, The Wall Street Journal first reported that Quibi was shutting down after just six months.

Earl Gibson III/Getty Images

Source: The Wall Street Journal

Katzenberg and Whitman wrote a letter to investors and employees saying that the company failed because of the pandemic, and because the idea wasn't strong enough.

Quibi CEO Meg Whitman and cofounder Jeffrey Katzenberg. Richard Bord/Getty Images for Cannes Lions

Source: Business Insider

On a Wednesday call telling employees they would be laid off, Katzenberg told them to listen to the song "Get Back Up Again" from the movie "Trolls" to help lift their spirits.

"Trolls." 20th Century Fox

Source: Business Insider

How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later

Mary Meisenzahl

In August 2018, Jeffrey Katzenberg and Meg Whitman created NewTV, a digital video startup that aimed to create "snackable" short content for smartphones.

That month, NewTV revealed it had secured $1 billion in funding from big names including Walt Disney, Warner Media, and Alibaba Group. At this point, no content had been announced.

In October, they announced the service would be called Quibi, short for "quick bites." "Jeffrey can't stop saying the name Quibi," Whitman said. "I think that will be a fun name for us."

Quibi signed a 10 year lease for an undisclosed amount for 49,000 square feet of office space in Hollywood.

By December, Katzenberg was already predicting launching as soon as 2019, with a two tier price system.

At that point, the company had 48 employees.

"We have one chance to launch and we need it to be absolutely perfect," Whitman said at a Variety summit.

In July 2019, BBC Studios announced it had invested in Quibi.

So far, a Steven Spielberg horror short, an action series with Liam Hemsworth, and a remake of Punk'd had all been announced.

In August 2019, a source told Business Insider that Quibi was on a "hiring rampage," poaching talent from Snap and Netflix.

In October, Quibi announced that it had sold out $150 million in ads for its first year. Advertisers included Discover, Walmart, Taco Bell, and PepsiCo.

Potential customers got their first look at Quibi in February 2020, when it became available for preorder in the App store.

Quibi officially launched on April 6 for $4.99 per month with ads, or $7.99 without. It also offered a 90 day free trial.

Quibi had 300,000 downloads on its first day, compared to four million on Disney Plus's launch a few months earlier. It rose to the number three spot in the App Store.

Less than a week after launch, Whitman said that Quibi would eventually be available on TVs. She said that was "always" the plan but would be expedited because of coronavirus.

By April 16, Quibi had dropped out of the top 70 in the App Store, below Netflix, Hulu, and an ASMR slicing app. It remained in number 11 on the Google Play Store.

In May, with 3.5 million downloads, Katzenberg told The New York Times that the coronavirus was responsible for "everything that has gone wrong" with the app.

This statement was at odds with other streaming services. Netflix and Disney Plus saw booms during the pandemic.

By June, Quibi was asking executives to take voluntary pay cuts, and considering laying off 10% of its 250 employees.

As the first 90 day free trials expired in the summer, The Verge reported that only about eight percent converted into paid subscribers.

In July, Quibi started paying bloggers to write about its shows.

Recode reported that Quibi was unsuccessfully searching for a buyer, and exploring other options to raise money in September.

In October, The Wall Street Journal first reported that Quibi was shutting down after just six months.

Katzenberg and Whitman wrote a letter to investors and employees saying that the company failed because of the pandemic, and because the idea wasn't strong enough.

On a Wednesday call telling employees they would be laid off, Katzenberg told them to listen to the song "Get Back Up Again" from the movie "Trolls" to help lift their spirits.

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