At the beginning of 2024, employees at Flip found themselves riding the crest of a remarkable wave of momentum and optimism. By mid-January, the ambitious startup—positioned as a bold competitor to TikTok—had secured a coveted spot among the top five applications in Apple’s App Store rankings. According to data from Sensor Tower, the company experienced an extraordinary 855% increase in downloads compared to the previous month, an explosive surge largely catalyzed by the looming possibility of a TikTok ban in the United States. For a platform that had already raised over $230 million in venture funding and carried an estimated valuation of roughly $1.1 billion, this seemed like the perfect storm: a rare combination of external circumstances and internal ambition fueling growth. Flip’s central proposition was audacious—to fundamentally reimagine the way people shopped online by merging compelling product reviews with entertaining, socially driven videos, blending commerce with content in a seamless fashion.
Behind the scenes, real-world challenges intruded on the euphoria. Wildfires in Los Angeles had grown so severe that Flip’s CEO, Noor Agha, was forced to flee his home without having time to retrieve basic belongings, let alone his car or essentials. Yet when he and Chief Operating Officer Eduardo Vivas sat down for a January 15 interview, both spoke with an enthusiasm that bordered on frenetic energy. Their message at that time was unwavering: being in such a rapidly evolving industry was thrilling, even if unpredictable. Vivas articulated their shared outlook succinctly, suggesting that the shifting currents of the global digital landscape represented both danger and opportunity for Flip. Still, sheer optimism dominated the tone of the conversation, and for a brief moment, the team believed they might actually carve out a permanent place in the social media hierarchy.
Fast forward only seven months, and the dream had completely unraveled. The same company that had been celebrating a meteoric rise at the beginning of the year shut down entirely by the end of August. The story of Flip’s decline—as pieced together from interviews with nine former employees, as well as from investors, influencers, talent managers, and brand partners—reads like a cautionary tale of how volatility, miscalculated bets, and external headwinds can swiftly topple even the most promising ventures. Attempts by Business Insider to solicit commentary from Agha, Vivas, or any other representatives of the company went unanswered, leaving observers to reconstruct the collapse from external accounts and internal recollections.
The company’s problems began almost immediately after its high-profile January boost. Just days after the executives painted their rosy vision, President Donald Trump abandoned his push to enforce the anticipated U.S. ban of TikTok. With its strongest external catalyst abruptly removed, Flip scrambled to sustain the heat it had built up. The startup poured immense sums into advertising campaigns and even established a $100 million equity fund designed to lure and retain creators by offering them lucrative long-term incentives. But when TikTok reasserted its presence in full strength, Flip’s buzz proved fleeting. Momentum that had once appeared unstoppable started faltering, exposing how dependent Flip’s growth had been on external regulatory uncertainty.
From there, the deterioration unfolded with brutal speed. By April, newly imposed tariffs raised costs for a number of Flip’s key vendors and partner brands, squeezing already fragile margins. In reaction, the company laid off employees and began emptying its Los Angeles headquarters—an unmistakable warning sign for those paying attention. The following month, eviction notices arrived for its warehouse, signaling the tightening squeeze on Flip’s resources. By June, the app had tumbled completely out of Apple’s U.S. App Store top-100 ranking, and within mere weeks, the company reduced its staff dramatically, often without offering severance, according to multiple former staffers. By late August, the curtain fell for good: Flip shut down its app, closing the final chapter of its turbulent story.
The abrupt closure shocked many of the employees, who, as recently as the spring, had believed that the company’s performance metrics pointed to a thriving business. They had watched as new brands joined the platform, downloads increased, and internal conversations brimmed with confidence. As one former worker recalled, the dissolution was not only unexpected but jarring in its velocity. Until the final round of layoffs, employees had been told repeatedly that Flip was on the verge of breaking out into something truly massive.
Flip’s instant rise and equally instant collapse reflects the enormous difficulty consumer technology startups face when attempting to challenge entrenched giants like TikTok, Meta, or Google. In pursuit of scale, Flip burned through millions in incentives: lavish ad spending, referral bonuses, and creator recruiting programs. Yet it remained an impossible contest. Tech behemoths command billions of users globally and wield financial resources capable of eclipsing even the most daring newcomers. Reflecting on these challenges earlier in the year, Agha himself admitted how daunting it is to construct a fully functioning social platform from the ground up. He described the undertaking as enormously complex, requiring countless interlocking components to align simultaneously for success.
Flip’s trajectory also exposes the inherent difficulty of merging entertainment-driven video content with commerce in the American market. Even for established platforms, the integration has proven elusive. TikTok itself continues to struggle to push its Shop initiative to the levels its leadership envisioned, while Meta has scaled back its e-commerce experiments and Amazon recently shelved its TikTok-inspired feed, Inspire. Industry analysts, such as Sky Canaves of eMarketer, have emphasized that altering consumer shopping habits does not happen overnight. Shoppers are often slow to adopt new behaviors, meaning that what works in markets like China may not simply be replicated in the U.S.
The origin of Flip dates to 2019, when Noor Agha, who was born in Iraq, joined forces with Jonathan Ellman to bring his vision to life. In its earliest conception, Flip was not even focused on product review videos. Instead, it was envisioned as a “try-before-you-buy” network, where users could receive apparel in the mail, upload photos of their outfits, and solicit votes from the community to determine which clothes they should purchase. At the time, fashion technology was experiencing a wave of experimentation, with platforms like Snapchat exploring virtual try-on tools and entrepreneurs keenly observing the explosive growth of social shopping in China. Other startups, such as Whatnot, were embarking on similar journeys in live commerce, eventually achieving multibillion-dollar valuations. By August 2021, Flip pivoted toward user-generated product reviews and live shopping moments, positioning itself to follow China’s example and aiming to revolutionize consumer retail experiences in America.
With $28 million secured in its Series A round and later an additional $60 million in Series B funding, Flip accelerated its efforts. Known influencers, including beauty guru Patrick Starrr, skincare expert Hyram Yarbro, and superstar Addison Rae, joined the platform, amplifying exposure and lending credibility. Internally, the company cultivated the energy of a high-flying startup culture. Its three-story office in El Segundo brimmed with amenities, from free snacks to quirky features like an unused trampoline. Music pulsed through the building, setting a high-energy rhythm that employees interpreted as emblematic of leadership’s drive. Beyond the enthusiasm, however, expectations remained demanding: many employees worked six days a week on critical tasks. It was simultaneously exhilarating and exhausting, and for those who participated, the sense of collective mission was tangible.
In 2023 and 2024, Flip escalated its rivalry with TikTok Shop directly, committing enormous funds to attract users and creators. The company distributed in-app referral credits sometimes worth more than $100 per new signup and launched a monumental $100 million “Founding Creators Fund” to secure loyalty among influencers. Through partnerships, including a major acquisition of Curated for $330 million in stock, the firm sought to diversify its capabilities. Yet the enormous outlays left the company burdened with acquisition and retention costs it simply could not sustain. Compounding these challenges, the anticipated TikTok ban continued to be delayed, removing the urgency for consumers to seek alternatives. As analyst Canaves later summarized, Flip’s economic model was unsustainable given the high expenses and the difficulty of scaling.
When Flip finally closed its doors, the company issued a statement declaring that its mission of creating a platform where users had an authentic voice had come to its conclusion. It touted milestones of having reached 16.5 million people, generating over 5 billion video views, and distributing $13.4 million in payments to creators, while driving $375 million in brand sales. Yet behind the impressive statistics, many former employees admitted they were kept in the dark about the company’s true financial health. Partner brands, like hat-maker Haak Wear, expressed surprise and disappointment, reminding their communities that such experiences highlighted the need to diversify sales channels.
Ultimately, Flip’s collapse is far from unique in the cutthroat technology landscape. Other flashy startups have risen quickly on bold promises only to shut down abruptly when models proved untenable, as in the case of the shopping app Nate. For creators, the shutdown served as confirmation of doubts over how sustainable Flip’s creator incentives truly were. Even Agha, during Flip’s period of explosive growth, acknowledged just how challenging it was to blend commerce with social video in an American context, once describing the experience as something that had nearly “killed us a thousand times.” Those words proved prophetically accurate. Flip’s journey, from meteoric ascent to precipitous decline, stands today as a vivid reminder that in the realm of consumer technology, hype and vision are rarely enough to guarantee survival against the gravitational pull of entrenched giants.
Sourse: https://www.businessinsider.com/how-tiktok-challenger-flip-unraveled-2025-9
