Facebook Video Chat App VChatter Scores Funding, Although Its Market Is Uncertain

Chatroulette-style Facebook video chat application vChatter has just raised $350,000 from angel investor Dave Kennedy, who co-founded a dating site that would eventually turn into Match.com. The funding will be used to make hires for the app’s development team with the goal of more rapid deployment of new features and efficient scaling, the company tells us.

The funding comes at an interesting time, as despite vChatter’s quick growth over the summer to a MAU peak of over 2.56 million in September, it has since slipped to 1.12 million, according to AppData Pro, our premium application metrics and trends monitor.

The world became enamored with the concept of video chatting with strangers last year, particularly around Chatroulette, but soon grew tired of the shallow interactions and high volume of unsolicited nudity. The eighteen year old founder of that company, which received valuations as high as $40 million at the peak of its popularity, says the massive fluctuation in traffic “was like a movie: Everybody watched it, and then everybody else. Well, now that they’ve all watched it, they’re less interested.”

Though vChatter has integrated features for chatting with specific friends — getting around Chatroulette’s initial interface problems — it is still experiencing a similar decline. Its DAU is now roughly a quarter of its peak in September. The app may be establishing a sustainable user count following the fad, leaving the future uncertain.

Facebook video chat could be a shaky industry, as Facebook could simply integrate video into its popular existing Chat feature, eliminating the need for a third-party app. vChatter will need to distinguish itself with innovative features that can reestablish growth or monetize existing users.

[Image credit: Fast Company]