Photo illustration of a Tumblr logo displayed on a smartphone with a COVID 19 sample image in the background.

After X's ban in Brazil, Tumblr reports ~350% user growth

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Photo illustration of a Tumblr logo displayed on a smartphone with a COVID 19 sample image in the background.

Image Credits: Omar Marques/SOPA Images/LightRocket / Getty Images

Bluesky isn’t the only social networking service to benefit from X’s ban in Brazil, now under legal penalties. Tumblr this week is also reporting an increase in both active users and blog creation, the company tells TechCrunch.

According to Tumblr, in the days since the X ban in Brazil, the site saw 222.99% growth in communities and 349.55% growth in users. More specifically, Tumblr’s daily active users in Brazil have shot up by 30% from the 110,000 it was seeing, on average, in the days ahead of the ban.

What’s more, the new users aren’t just visiting the site, they’re creating accounts, too, Tumblr claims. The company says blog creation and community joins have also increased. (The company didn’t provide metrics on this front, however.)

Of those users who joined communities, Tumblr found that the percentage of daily active users in Brazil was also five times higher than those in the rest of the world.

The increase on Tumblr is not as significant as what’s been happening on Bluesky, however. Following X’s ban in the country, large numbers of Brazilian users began establishing accounts on the decentralized social networking startup. At one point, half a million users had joined Bluesky’s service over a two-day period. The company that had just 6 million users as of May 2024 has topped 10 million and continues to grow.

Still, any jump in usage could be beneficial for Tumblr, presuming it wants to continue to sell ads in the long term. The age-old blogging site and social platform was acquired by WordPress.com maker Automattic in 2022 for $3 million, down from the $1 billion Yahoo (TechCrunch’s parent company) once paid for it back in 2017. Since then, the company has been losing money at a rate of $30 million per year, CEO Matt Mullenweg said last July. As a result, Automattic absorbed nearly 140 people from Tumblr’s staff, reassigning them to other projects at the company. More recently, it said it would move Tumblr’s half a billion blogs to WordPress on the back end to improve efficiencies.

Elon Musk

Musk dodged Brazil's X ban by 'coincidence,' says Cloudflare CEO

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Elon Musk

Image Credits: Axelle/Bauer-Griffin/FilmMagic / Getty Images

X went back online in Brazil earlier this week, three weeks after Elon Musk’s platform was blocked under orders from Brazil’s Supreme Court. That prompted Brazil’s top court to fine X Corp. nearly $1 million for every day the platform remained accessible in the country.

However, Cloudflare’s CEO Matthew Prince tells TechCrunch that X going back online in Brazil this week was all a “coincidence.”

“I don’t think anything about this change was intentional to overcome a block in Brazil,” said Prince in an interview with TechCrunch. “This was literally just [X] switching from one IT vendor to another IT vendor.”

Some months ago, Prince said, Cloudflare won a deal to provide X with cloud computing services in several regions across the globe, including Brazil. X had previously used Fastly, a competitor to Cloudflare, and the social media platform is currently in the process of rolling out that switch. Changing providers also changed IP addresses associated with X, which disrupted how Brazilian internet service providers were blocking the X platform.

“We have never talked with [X] about helping them get around the Brazilian dam,” said Prince. “They happened to transition a bunch of their traffic from Fastly over to us, especially in the Latin American region, over the last week.”

Prince describes this as wild coincidence, where his sales team won a deal, and as a result ended up inadvertently “wading into some geopolitical Elon Musk vortex of craziness” months later. Some may find that a bit hard to believe, given that Elon Musk has tried multiple avenues already to skirt Brazil’s ban on X. Musk tried delivering X directly to Brazilians through his Starlink satellites earlier this month, but later backed down.

A spokesperson for X says the platform changed network providers when Brazil shut down X weeks ago, which disrupted its infrastructure throughout the rest of Latin America, in a statement posted on its Global Government Affairs account. So is the timing of all this truly a coincidence? You be the judge.

However, Brazilian regulators say Cloudflare has been extremely cooperative in helping to get X reblocked, according to The New York Times.

Brazil implemented its block by requiring ISPs to block traffic to certain IP addresses. When X switched from Fastly to Cloudflare, therefore, the block was no longer in effect. However, Prince claims his company did not know this was going to happen, and even says he doesn’t think X was actively trying to circumvent Brazil’s ban. He even knocked Brazil for using an insufficient strategy to block X.

“They chose to implement it in a way which is kind of kludgy, and very fragile,” said Prince. “That assumes that X, Twitter, or whatever we call it, will always be on that IP address… It changed because they switched to Cloudflare, but if X were trying to play games here, they could have switched their IP address very easily without switching to Cloudflare.”

money twisted tornado style

Stripe's big changes, Brazil's newest fintech unicorn and the tale of a startup shutdown

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money twisted tornado style

Image Credits: Bryce Durbin / TechCrunch

Welcome to TechCrunch Fintech! This week, we’re looking at Stripe’s big product announcements, a bump in valuation for a Brazilian fintech startup and much more!

To get a roundup of TechCrunch’s biggest and most important fintech stories delivered to your inbox every Sunday at 7:00 a.m. PT, subscribe here. 

The big story

Stripe announced that it will be de-coupling payments from the rest of its financial services stack. This is a big change, considering that in the past, even as Stripe grew its list of services, it required businesses to be payments customers in order to use any of the rest. Alongside this, the company is adding in a number of new embedded finance features and a new wave of AI tools. The fintech giant also announced that after a six-year hiatus, it will let customers accept cryptocurrency payments, starting with just one currency in particular, USDC stablecoins, initially only on Solana, Ethereum and Polygon.

Analysis of the week

Brazil got a new fintech unicorn last week. Banking-as-a-service startup QI Tech achieved unicorn status after raising an undisclosed amount of capital in a General Atlantic-led investment that was an extension of its $200 million Series B raise, which TechCrunch covered last October. QI Tech said it is also preparing to close on the acquisition of Singulare, a Brazilian fund administration services provider, in the third quarter. Meanwhile, another Brazilian startup, Vixtra, secured $36 million in debt and equity funding — another example of companies in the region continuing to attract venture dollars.

Dollars and cents

Bump, a platform that helps creators manage and grow their businesses, announced a $3 million seed round, with investments from ImpactX, Capitalize and Serac Ventures. Bump allows creators to track income and market value, which can help them negotiate better deals and see how much money partners owe them.

Y Combinator alum and B2B fintech startup Fintoc raised a $7 million Series A round of funding to consolidate its presence in its home country, Chile, and in Mexico, where it expanded one year ago.

Pomelo, a startup that launched in the Philippines in 2022 — allowing people in the United States to send money to the country while at the same time building their credit — has raised $35 million in a Series A round led by Dubai venture firm Vy Capital with participation from Founders Fund.

You can hear the Equity crew talk about this deal and more here:

What else we’re writing

Bengaluru-headquartered CRED, valued at $6.4 billion, has received the in-principle approval for a payment aggregator license in a boost to the Indian fintech startup that could help it better serve its customers and launch new products and experiment with ideas faster.

Winding down a startup can be bittersweet for founders. In the case of Fundid, rising interest rates killed the business finance startup. But VCs and partners hurt it, too, founder Stefanie Sample says in this compelling read by Christine Hall.

After a tumultuous year, banking-as-a-service (BaaS) startup Synapse has filed for Chapter 11 bankruptcy and its assets will be acquired by TabaPay.

High-interest headlines

401Go raises $12M Series A to fuel next phase of growth

Ramp vs. Brex risks becoming fintech’s Uber vs. Lyft, some VCs warn

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