Bluesky CEO Jay Graber Steps Down as Decentralized Social Network Discloses $100 Million Series B
Founder Jay Graber becomes chief innovation officer as Bluesky discloses a $100M Series B led by Bain Capital Crypto, but daily active users have fallen 40 percent year-over-year.
Overview
Bluesky, the decentralized social network built on the AT Protocol, is undergoing its most significant leadership change since its founding. CEO and co-founder Jay Graber announced on March 9 that she would step back from the top role to become chief innovation officer, with former Automattic CEO Toni Schneider taking over as interim chief executive while the board searches for a permanent replacement. Ten days later, the company disclosed a previously unannounced $100 million Series B round, signaling confidence in Bluesky’s future even as engagement metrics tell a more complicated story.
The Leadership Transition
Graber, who led Bluesky from its origins as a Twitter-backed research project to a standalone social network with over 43 million registered users, framed the move as a natural evolution. “As Bluesky matures, the company needs a seasoned operator focused on scaling and execution, while I return to what I do best: building new things,” she wrote in a blog post on the company’s website.
Schneider, who served as CEO of Automattic — the company behind WordPress.com — and is a partner at True Ventures, had been advising Bluesky and Graber personally for over a year, according to CNBC. Both Automattic and True Ventures are investors in Bluesky. In a personal blog post, Schneider described the role as “coming off the bench” and expressed commitment to Bluesky’s open protocol vision.
The board is conducting a search for a permanent CEO, though no timeline has been disclosed.
The $100 Million Series B
On March 19, Bluesky announced a $100 million Series B round led by Bain Capital Crypto. The round, which closed in April 2025 but had not been previously disclosed, values the company at approximately $700 million, according to TechCrunch. Participating investors included existing backers Alumni Ventures and True Ventures, along with new investors Anthos Capital, Bloomberg Beta, and Knight Foundation.
The timing of the disclosure — arriving the week after Graber’s departure announcement — appeared designed to reassure the market and Bluesky’s developer community. In its official blog post, the company emphasized growth since its Series A in October 2024, noting that it had expanded from 13 million to over 43 million global users. Developer engagement also grew, with over 400,000 monthly downloads of AT Protocol developer tools and more than 1,000 third-party applications built on the protocol, according to the same post.
The ecosystem now includes startups such as the video app Skylight and Instagram alternative Flashes, as well as larger companies like Flipboard, which has been building an open social app called Surf on AT Protocol, as reported by GeekWire.
The Engagement Challenge
Behind the headline user numbers, Bluesky faces a retention problem. Daily active users declined approximately 40 percent year-over-year through October 2025, according to market intelligence firm Similarweb data cited in multiple reports. While 43 million accounts are registered, estimates suggest only 1.5 to 3 million users appear daily — a ratio that trails competitors significantly.
The competitive pressure is substantial. Meta’s Threads reached 400 million monthly active users by August 2025 and has been outpacing X (formerly Twitter) in daily active mobile users since September 2025, according to Similarweb. That trajectory puts Threads in a commanding position among text-based social networks, leaving Bluesky to compete for a much smaller slice of the post-Twitter migration.
Bluesky has responded with a 2026 product roadmap that includes overhauling its Discover feed with topic tags, extending video length limits, speeding up uploads, and improving thread creation, according to TechCrunch. However, the platform still lacks features that competitors shipped months ago, including private accounts, drafts, and long-form video support.
What Comes Next
The AT Protocol, the open-source framework underpinning Bluesky, is currently undergoing standardization within the Internet Engineering Task Force, which could give the protocol broader institutional legitimacy. The combination of a well-funded balance sheet and protocol-level standardization represents Bluesky’s core strategic bet: that a decentralized architecture will attract developers and users who want to own their social graph rather than rent it from a platform.
Whether that bet pays off depends on execution under new leadership. Schneider’s track record at Automattic — which scaled WordPress into a platform powering roughly 40 percent of the web — suggests operational experience with open-source ecosystems. But the challenge of converting registered accounts into daily active users, while competing against Meta’s resources and distribution, will test whether decentralization is a sufficient differentiator or merely a philosophical distinction that most users do not notice.