IRL, an event organising app aimed at the younger generation, last week shut off its servers and closed down the app. The company behind it had raised more than $200 million in venture capital funding since 2021 and was actually valued at more than $1 billion. That was because it had a huge user base of 20 million. It’s not surprising the valuation was so high for an app in the social discovery space with that many users. They are incredible numbers. The only problem: it seems like it wasn’t true.
An internal investigation by the board, according to a report by The Information, exposed that as many as 95 per cent of the IRL app’s users were fake and botted. Reportedly, there had been some scepticism for a while at the company among employees, about founder and CEO, Abraham Shafi’s claims of high user numbers. Shafi was actually suspended and removed from the board of directors in April, and it would now seem apparent why.
Five per cent of 20 million users would still suggest a userbase of one million strong, something many emerging social discovery apps would love to have. Those users have now been greeted by a message on the company’s website that says:
“IRL has shut down as of June 27th at 12pm PDT. We thank you for hosting your community chats with us, and we wish your community great conversations on other platforms moving forward.”
Social discovery is an exciting and burgeoning space. We totally expect to see it grow and change massively in coming years, with new players entering, and old stalwarts expanding. There is of course a flip coin, and every business that enters can’t be a flying success, It seems IRL is one of the first big examples of the industry’s growing pains.