Dispo has lost favor with investors, and now some of its funding may be at stake.
Just last month the camera-app startup cofounded by YouTube star David Dobrik had one of the hottest funding rounds in Silicon Valley, a $20 million Series A round led by Spark Capital that valued the company at $200 million. But Spark severed ties with the startup after a former member of Dobrik’s YouTube Vlog Squad was accused of rape, as reported in an investigation last week by Insider’s Kat Tenbarge.
And then other investors began distancing themselves.
As it turns out, $8 million of that funding hasn’t yet landed in the bank, and that amount is now “on pause,” a source familiar with the situation tells Business Insider.
An SEC filing from Tuesday shows that Dispo has received about $16.1 million in funding. That amount includes $4.1 million in converted SAFEs, a type of funding structure that gives investors shares after the company has raised additional funds from, for instance, a seed round.
The remaining $8 million, which accounts for the rest of Dispo’s Series A round, is listed as “remaining to be sold.” The source told Insider that investors have not abandoned the deal and that Dispo doesn’t expect its $200 million valuation to change.
Spark’s portion of the funding was about $12 million, Axios’ Dan Primack reported, and it had closed, but other investors, who have not yet cut their checks, could still seek to renegotiate Dispo’s valuation. It’s not clear which investors may be seeking to do this, but Dispo has a handful of prominent investors, many of whom have not yet publicly commented on the controversy.
Spark declined to comment, while Seven Seven Six and Unshackled did not respond to inquiries from Insider.
Since Spark cut ties with Dispo, the company has announced that Dobrik has stepped down from its board. Two of the company’s investors, Seven Seven Six and Unshackled Ventures, have said they would donate any returns from their investment in the startup to organizations working with survivors of sexual assault. Another investor, Lime CEO Wayne Ting, said he would not invest in any of the company’s future funding rounds.