HQ Trivia, the once-buzzy quiz show app, is struggling, according to a new report by Digiday, which alleges that the company recently turned down a new funding round from Lightspeed Venture Partners.
HQ Trivia allegedly rejected the round because it would have been a down round, among other reasons — meaning that shares would’ve been priced lower than the company’s most recent round in Feb. 2018, as would have been its ensuing valuation. The company last raised $15 million at a $100 million valuation; that round was led by Founders Fund, with participation from Lightspeed.
News of the proposed funding arrives after layoffs were conducted at HQ Trivia earlier this month, Digiday notes, whereupon the company cut staff by 20% to under 30 employees — which in turn spawned additional (voluntary) departures. In April, flagship host Scott Rogowsky departed due to a disagreement about his time commitment to the startup.
To add to these problems, HQ Trivia is still on the hunt for a new CEO, per Digiday, after co-founder Rus Yusupov was named the company’s interim chief in the wake of co-founder Colin Kroll’s death of a reported overdose in December. No successor has been named, though employees launched an internal petition in February to depose Yusupov. Three staffers were subsequently fired for their participation in that grassroots push, according to Digiday. (This is not the first time that the company has reportedly been plagued by drama at the top of its C-suite).
Digiday reports that HQ Trivia has clocked roughly $15 million in ad revenues since its founding — an impressive feat — plus an additional $5 million from in-app purchases. In January, the company said that it had taken in roughly $10 million in ad revenues to date on the strength of quizzes sponsored by the likes of General Motors, Fox, Warner Bros., and Nike. Now, HQ Trivia is looking to build up its programmatic advertising business.
However, HQ Trivia is not cheap to produce. The company spends roughly $1 million per month to put on the daily quiz shows, according to Digiday, which air daily at 9 pm.