IRL, the social app that aimed to bring people together for real-life events, has ironically been revealed to have a majority of non-existent users. An internal investigation conducted by IRL’s board of directors discovered that 95% of the reported 20 million users on the app were either automated or bots, according to The Information. Consequently, despite raising over $200 million in venture capital, IRL is now shutting down.
Initially positioned as an alternative for event organizing among Generation Z, who are decreasing their usage of Facebook, IRL faced internal challenges after securing a $170 million Series C funding round led by SoftBank, which valued the company at $1.17 billion.
Last year, IRL laid off approximately 25% of its team, amounting to around 25 employees. These layoffs came as a surprise, considering that IRL had significantly increased its headcount in the previous year. Former CEO and founder Abraham Shafi, in a memo to employees obtained by TechCrunch, urged them to adapt and be disciplined, citing WhatsApp’s achievement of amassing 450 million users with a team of just 55.
While Shafi claimed in the memo that the company had sufficient funds to last until 2024, doubts arose among IRL employees regarding the accuracy of the app’s reported 20 million monthly active users. Additionally, the U.S. Securities and Exchange Commission (SEC) initiated an investigation into whether IRL violated securities laws. Consequently, IRL’s board of directors suspended Shafi and appointed an acting CEO in April.
Attempts to reach out to Shafi and another IRL employee were unsuccessful, as both their IRL email addresses have been disabled. The current financial status of IRL remains uncertain, but the company has stated that it will return its remaining capital to shareholders, according to The Information.
