More likely, this Colors app is probably a very, very tiny part of what they really got funded for.
Conclusion: no one really knows what they got funded for. Sure, a stealth company getting 40M in funding is bad; but getting 40M for an app called Colors is what's got people ticking.
I've read Halting State before. This is a secret government operation! The mobile photo social sharing app is just a cover for the Dept. of Homeland Security to prevent terrorists from acquiring our nation's coupons!
Conclusion: no one really knows what they got funded for. Sure, a stealth company getting 40M in funding is bad; but getting 40M for an app called Colors is what's got people ticking.