For a company whose product never took off, the valuation is puzzling. Sure, they had some big name investors, but is this how the supposedly meritocratic tech sector makes decisions: based on clout and connections? Same old school thinking in disguise?
They know that traction doesn't matter to them since they have almost a billion people using Snapchat. They want the team, the current software, and implement it just to stay ahead of the competition (whatsapp, etc). Vurb was in the right place at the right time and in this case traction doesn't matter.