Bluesky Secures $700M Valuation After User Surge
Bluesky, the decentralized social media alternative to X, is making waves. The platform, which has positioned itself as a safer and more idealistic haven for social networking, is in the final stages of raising a funding round led by Bain Capital Ventures, valuing the company at around $700 million, according to insiders.
A Post-Election Surge
Bluesky’s growth exploded after Donald Trump’s victory in the 2024 U.S. presidential election. Disenchanted X users, wary of the platform’s ties to Elon Musk, a Trump supporter, flocked to Bluesky. The platform saw its user base skyrocket from 3 million at launch to 25.9 million by the end of 2024, with nearly half of its users joining in the last six weeks of the year.
This unexpected surge pushed Bluesky’s infrastructure to its limits. “We’ve grown by a million users every day for the last eight days,” said COO Rose Wang. “We had to fast-forward plans to expand our server capacity.”
A History Rooted in Twitter
Bluesky originated in 2019 as an internal project at Twitter (now X) under Jack Dorsey’s leadership. By 2021, it became a standalone Public Benefit Corporation, headed by Jay Graber. Dorsey, who left Bluesky’s board in 2024, criticized the platform for “literally repeating all the mistakes” of Twitter.
Despite these critiques, Bluesky has set itself apart with its decentralized architecture and a commitment to user control. Its bare-bones design resembles early X but has evolved to include features like hashtags, direct messaging, video sharing, and trending topics.
A Funding Challenge: Growth Without Ads
The new funding round is expected to bring fresh opportunities—and challenges. Unlike its competitors, Bluesky remains ad-free and has publicly rejected advertising as a primary revenue model.
“We believe there must be better strategies to sustain social networks that don’t require selling user data for ads,” the company stated in a 2023 blog post.
This commitment raises questions about Bluesky’s monetization strategy. With a rapidly growing user base and new funding in hand, the company will need to innovate to sustain its operations without compromising its principles.
What’s Next for Bluesky?
As Bluesky grows, it faces the dual challenge of maintaining its identity as a user-first platform while scaling its infrastructure and developing a sustainable business model. The $700 million valuation reflects its potential, but also the high expectations from investors like Bain Capital Ventures.
With a community eager for a safer, ad-free alternative to traditional social networks, Bluesky is poised to disrupt the space—if it can navigate the challenges ahead.
