In just two months, Clubhouse has become the go-to venue for celebrities like Elon Musk or Drake to lay out everything from telepathic monkeys to stock market valuations. But the real winner of the stratospheric rise in the audio chat app is a loss-making Shanghai startup called Agora Inc.
Best known in tech circles as a diligent but unobtrusive provider of software tools, Agora is up more than 150% since mid-January when online chatter started circulating about how it powers the world’s most popular new social media forum. That’s because the little-known company – now worth nearly $ 10 billion – provides developers with everything they need to build real-time voice and video capabilities into applications – a template known as a software development kit.
Agora – ancient Greek for a forum or market – has been publicly linked to Clubhouse since its IPO last summer, although it remains unclear to what extent the red-hot social media forum has used its software suite. When decompiling the Clubhouse app, Agora’s name is revealed in the code, which means Clubhouse is using at least part of the Chinese company’s SDK, according to two engineers familiar with the case, who asked not to be named because disassembling software code violates Apple’s iOS User Policy.
Clubhouse co-founders Paul Davison and Rohan Seth have said in conversations about the app that they use Agora, according to two people who overheard those discussions but asked not to be named because Clubhouse doesn’t publicly talk about its tech stack. And in an experiment this week, German software developer Andreas Lehr told Bloomberg News that he analyzed the traffic coming from his phone while connected to Clubhouse and noticed several calls to agora.io.
In addition to just boosting Agora’s stock price, that amorphous link is starting to raise concerns about the app’s security. It’s the same vague fear that clings to the biggest companies, from TikTok owner ByteDance Ltd. to outrageous outfits: that Beijing has the power to not only demand that they hand over data at will, but also force Chinese companies to spy on his behalf. Agora declined to comment on her relationship with Clubhouse, but said in a statement that she takes privacy and security seriously.
“As in the case of Zoom, Agora still runs its centralized service in several jurisdictions,” said Suji Yan, the founder and chief executive officer of data privacy startup Mask Network, which is building a tool that allows users to receive encrypted messages on Twitter. and Facebook. “It is difficult for a public company like Agora not to respond to a request from a local government.”
The debate over Agora’s level of involvement comes even as Beijing appears to be stepping in against Clubhouse. Many of the app’s users in China say they haven’t been able to access the service since Monday, following an explosion of discussions over the weekend on taboo topics from Taiwan to Xinjiang.
But it’s the potential for surveillance that worries international users. Chinese law requires companies to provide information upon request, and even collect data on Beijing’s behalf, if deemed in the interest of national security. That, along with allegations by US lawmakers that Chinese companies can build loopholes in devices and software that the Communist Party can exploit, is at the heart of a growing hostility towards China’s largest technology providers.
Agora’s own customizable tools run on users’ devices as part of client applications such as Clubhouse. Agora co-founder Tony Wang has told the media that the company does not store end-user data, but serves as a “passover.” But from a technical standpoint, it gets real-time voice data that it helps transmit on Clubhouse. It won’t be able to identify that with users’ mobile numbers – which in turn expose their real identities – because such data is managed by Clubhouse itself, the two engineers familiar with the matter said.
In theory, Chinese agents could compare Agora’s voice data with other voice data that does relate to real IDs – for example, that of state-owned Chinese telecom operators – as a way of identifying activists or dissidents, Mask Network’s Yan said.
“Right now I don’t think the government has the computing power to do that, but you can’t rule out that possibility going forward,” said Yan. “And the cross-referencing of voice data bound to the same cell number will leak more data and cause more potential problems than we thought.”
Founded in 2013 by software engineer Tony Zhao, Agora has grown into one of China’s largest providers of real-time communications technology, with big names such as education services provider New Oriental Education & Technology Group and dating app operator The Meeting Group. It has attracted investments from venture capital firms including SIG, Coatue Management and China’s Morningside, which is also one of the first backers of the short video app Kuaishou Technology.
Sales grew 81% to $ 30.8 million for the September quarter, as companies outside of China contributed more than 20% of sales, executives told analysts in a post-earnings call in November.
Agora herself highlighted China’s complex internet regulatory regime as a risk factor in its IPO prospectus, adding that it may be necessary to take further steps to comply with the European Union’s GDPR privacy laws or regulations elsewhere. It currently offers products in more than 100 countries.
Still, speculation about Clubhouse’s Chinese roots hasn’t hurt its worldwide popularity for now, as has Beijing’s actions.
“The discussions in the Chinese language I have heard over the past week have been remarkable in that they addressed issues that are heavily censored in China while allowing for open discussions about the Chinese border,” said Graham Webster of Stanford University Cyber Policy Center.
(Except for the headline, this story has not been edited by NDTV contributors and has been published from a syndicated feed.)