Coronavirus and Your Money: Special Coverage
By Rob Wile
Updated: March 26, 2018 1:01 PM ET | Originally published: January 4, 2018

More than 2 million people logged onto their phones at the same time during the Oscars. But it wasn’t to tweet about Jimmy Kimmel or Frances McDormand.

It was to play an app called “HQ.”

HQ is a trivia app craze that invites users to play a quiz game show in real-time with live, professional hosts. And—thanks to new sponsors like Nike and Warner Brothers—the app is handing out hundreds of thousands of dollars.

Every day at 9 p.m. EST (and, during the week, 3 p.m. EST), players load up the mobile app to play for real prize money. If a player answers 12 questions correctly, she splits the jackpot with other winners. Players typically win between $10 and $12, and some jackpots have reached $18,000. Winners get their money through a PayPal deposit.

HQ’s popularity—and the fact that the trivia app is free—has led some to wonder: How does HQ make enough money to gives away thousands of dollars in prizes?

The company is backed by venture capital, a rep for HQ Trivia told Money in January, months before it raised an additional $15 million in venture funding. At the time, HQ Trivia said it was not focused on profitability, meaning those jackpots were being paid out by deep-pocketed Silicon Valley investors betting the game will get big enough that, eventually, companies will pay to be associated with it.

That bet seems to have paid off. HQ Trivia recently inked advertising deals with Warner Bros. and Nike that will allow it to hand out record-breaking jackpots. Warner Bros. is partnering with HQ Trivia to promote its upcoming film ‘Ready Player One,’ based on the science fiction novel by Ernest Cline, and giving away a $250,000 jackpot. Ad Age, citing a person familiar with the marketing program, says HQ Trivia will name the sponsor and include questions that relate to the film.

The trivia app is also partnering with Nike for Air Max Day, an annual “holiday” commemorating the release of Nike’s first Air Max sneakers on March 26, 1987. The shoemaker is releasing a limited edition of the iconic Air Max 1 this year and sponsoring a $100,000 jackpot. HQ Trivia told MONEY it will be giving away “a prize that money can’t buy, for 100 winners” and offered this tweet as a clue to what the prize could be.

Yusupov and Colin Kroll, two founders of the now defunct social media company Vine, launched HQ Trivia last fall. It was built by Intermedia Labs, the app developer they created after they left Vine. While their individual net worths are not known, Twitter bought Vine in 2012 for $30 million.

HQ Trivia is still in the early stages of becoming profitable. Prior to its most recent round of funding, the company raised $8 million and was asking venture capitalists to value it at between $80 million to $100 million, according to Recode.

HQ Trivia founders Rus Yusupov (L) and Colin Kroll (R)
Gabe Ginsberg—Getty Images for Variety

Recode also reported that “at least three prominent investors have decided against funding the startup after finding troubling conduct on the part of the founders they uncovered during due diligence.” It is not clear what that behavior was. The Daily Beast published a story last year in which one of HQ Trivia’s co-founders threatened to fire HQ’s most popular host, Scott Rogowsky, if the story ran because Rogowsky was initially not given permission to speak to reporters. Yusupov later apologized for “being a jerk.”

The app launched on Android earlier this year, making it available to an even wider audience.

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