Once-hot ‘Instagram for video’ app Viddy sells for a fraction of its former value

The makers of Viddy, a once fast-growing app for recording and sharing short videos, sold their company today for a reported fraction of their former valuation. Fullscreen, which offers tools and advertising services to makers of YouTube videos, scooped up Viddy — which rebranded last year as Supernova — for around $15 million, according to Re/code. And while Viddy lives on in app stores, its dream of becoming video’s answer to Instagram appears to be dead and buried.

Fullscreen did not immediately respond to a request for comment about the app’s future. But its slow fade is remarkable given that it rocketed from 1 million to 10 million users in the first quarter of 2012 and was once valued at $370 million. Investors included Twitter co-founder Biz Stone, Shakira, and Jay-Z’s Roc Nation, and Viddy attracted celebrity users including Justin Bieber, Snoop Dogg, and T-Pain. Along with SocialCam, an app it closely resembled, Viddy’s rise was fueled by a tight integration with Facebook that caused its videos to appear prominently throughout the social network.

But Facebook began limiting the apps’ access to the News Feed, and their hockey-stick growth soon collapsed. SocialCam quickly sold itself to AutoDesk for $60 million, but Viddy persevered. Last fall after becoming Supernova, the company released apps for slow-motion video sharing and group chat. A spokesman for Fullscreen told The Verge that all apps would continue to be supported — but now that Instagram itself has become the Instagram for video, Viddy’s days as a standalone app appear to be numbered.