By Tech Crunch
Ironically, the social app IRL‘s users do not exist in real life.
An internal investigation by IRL’s board of directors found that 95% of the app’s reported 20 million users were “automated or from bots,” The Information first reported. So, after raising more than $200 million in venture capital, IRL is shutting down.
IRL was poised to become an event organizing alternative for Gen Z, who are using Facebook less and less. But after raising its SoftBank-led $170 million Series C round at a $1.17 billion valuation, the company’s internal troubles became more obvious.
Last year, IRL laid off 25% of its team, or around 25 employees. During the year prior, IRL had more than tripled its head count, so these cuts came as a surprise. In a note to employees, obtained by TechCrunch, former CEO and founder Abraham Shafi encouraged employees to “adapt” and “be disciplined,” citing that WhatsApp grew to 450 million users with a team of just 55.
“Becoming one of these iconic, impactful companies is akin to winning a gold medal in the Olympics. In fact, probably more challenging,” Shafi wrote in the memo, which was full of similarly outlandish analogies. “Like the Olympics, we know most people don’t want to be Olympians. In the same way, not everyone will want to walk the path we are walking. But for those that want to push their limits and find out what they are capable of, this culture is for you.”
“If something sounds too good to be true, it probably is. It is crucial for investors to conduct thorough due diligence on their potential investment companies before committing capital. Regardless of how great the “hype” is around a company, it is imperative that lawyers advising investors push their clients to conduct research and analysis and gain a deeper understanding of the company’s financial health, market position, management team, and growth prospects. A comprehensive due diligence process might seem expensive and time consuming in the beginning however, it helps mitigate losses and allows investors to make more informed investment decisions based on a realistic assessment of the company’s fundamentals.” – Shruti Gurudanti, Rose Law Group partner and director of corporate transactions
