Bluesky seeks a $700 million valuation—and an identity apart from Meta, X

The news: Bluesky, the text-based social media platform created by Twitter founder Jack Dorsey, is seeking a valuation of $700 million in a new funding round, per Business Insider reporting.

• The news comes as Bluesky is working to differentiate itself from leading social platforms and Elon Musk’s X. Mediapost reports that the company is attempting to brand itself as a “free speech” platform in the wake of Meta and X backing away from fact-checking.

The path to profit: Bluesky experienced a brief but attention-grabbing surge after the 2024 election as users fled X, which had also been banned in Brazil. Bluesky gained millions of users per day. But Twitter’s troubled history with advertising raises questions about its ability to stand out in a crowded field.

• Bluesky’s largest competitor outside of X is likely Meta’s Threads, a text-based app attached to Instagram that has likewise seen a surge in users, outpacing Bluesky’s gains. Threads began testing advertising this month, and its integration with Meta’s larger ecosystem is likely to attract heavy ad spend.
• However, despite a previous aversion to advertising, Bluesky’s CEO recently said the company isn’t ruling it out. In the wake of its late 2024 user growth, Jay Graber said the company is willing to explore non-intrusive ad formats.

Our take: Even if Bluesky’s user numbers are small against X and Meta, it's not a platform advertisers should rule out. Early signs show that it has a highly engaged user base—several publishers report that its link referral traffic far outpaces X and Threads, meaning certain publishers and advertisers could benefit from the platform.