Cameos value has taken a hit of, over 90% in the recent ‘cramdown’ funding round. The company disclosed to its shareholders that a $28 million funding round has been approved, resulting in a decrease in its valuation reflecting a slowdown in the business of the celebrity video shoutout app.

The funding, spearheaded by current investor Valor Equity Partners is expected to value the company at under $100 million post investment as per an investor. This marks a drop from its value by at least 90%. Cameo had reached a peak valuation of $1 billion back in March 2021 during a funding round when its platform for videos featuring athletes and actors gained popularity amid the pandemic.

Cameos valuation set to plummet below $100 million in the upcoming ‘cramdown’ funding round.

The new $28 million infusion led by existing backer Valor Equity Partners.
A spokesperson for the company stated that the fresh funds will ensure sustainability, for the business moving

However sales saw a decline as lockdown restrictions were lifted.The recent funding round is part of a trend where struggling startups are resorting to “cramdown” financing. This involves issuing shares at a discount, to the previous valuation resulting in existing investors who do not participate being heavily diluted and losing certain protections linked to their shares.

Several startups that were once valued over $1 billion have recently undergone down rounds, including Quora, Truepill, Turntide Technologies and Indigo Ag.

CEO Steven Galanis and venture capital firm Kleiner Perkins along with investors like SoftBank’s Vision Fund and Lightspeed Venture Partners are involved in this latest funding round. However it remains uncertain if these initial investors will also contribute this time.

The new investors are acquiring shares at $11.35 each while devaluing the existing shares to 1% of their previous value. This results in a 96% decrease in the share price.

Cameo has confirmed the funding round without disclosing the valuation details. The companys profitability and growth have generated excitement among the team, for this development.

The companys spokesperson mentioned that these funds would support the business for the future. Cameo has faced challenges following a surge, in demand for gifts during the pandemic. The Chicago based company has significantly reduced its workforce, including a round of layoffs summer after fundraising attempts.

Cameo also experienced the departure of a board member, Earvin “Magic” Johnson, who is no longer affiliated with the companys booking service. The reasons for Johnsons disassociation from Cameo remain unclear.

In October reports indicated that Cameo was seeking to secure a minimum of $10 million in funding. CEO Galanis shared on LinkedIn that the company achieved year over year revenue growth after than two years and mentioned an increase in talent for booking by over three times compared to the previous year. Despite facing challenges Galanis expressed pride, in his teams resilience and dedication to fulfilling the companys mission and vision.Cameo experienced a rise, in popularity towards the end of year when former congressman George Santos signed up for the platform as noted by Galanis to Semafor marking it as one of their successful launches. The startup also saw an increase in users, with actors joining during the Hollywood strike.

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