Unicorn IRL Admits 95% of Users Fake and Shuts Down

The messaging app that raised $200M announces shutdown following massively exaggerated claims about 20 million user base.

Social media app IRL has announced that it is closing down as of today, after an internal review found that userbase claims were massively inflated.

The app was targeted toward Gen Zs who are reportedly using the major social media apps less than their older counterparts.

Fast forward a couple of years and an internal investigation by IRL’s board of directors has revealed 95% of users, or about 20 million accounts, are automated by bots.

The App That Encouraged Users to Meet “In Real Life”

IRL was founded in 2016 and centered around its group messaging app that encouraged users to meet “in real life” (hence the name). Following its Series C raise in 2021, the startup’s valuation swelled well past the $1 billion mark.

Last year, CEO and co-founder Abraham Shafi boasted confidently of its 20 million monthly active users. Yet, the recent investigation by the board of directors now confirms Shafi’s claims were massively inflated and real users were more likely somewhere around the one million mark, as first reported by The Information.

IRL User Count Questioned

Shortly after employees raised questions over the true user count, 25% of IRL’s workforce were laid off, or around 25 staff in total. While tech layoffs aren’t shocking in 2023,  this one bucked the trend, given IRL’s huge valuation and the tripling of its headcount from the year previous.

Following the layoffs, Shafi encouraged remaining staff to “adapt” and “be disciplined” in an internal memo likening their growth trajectory to WhatsApp, which grew to 450 million users with a team of just 55.

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In the same memo, Shafi compared IRL and its team to Olympic gold medallists among other exaggerated analogies:

“Becoming one of these iconic, impactful companies is akin to winning a gold medal in the Olympics. In fact, probably more challenging…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.” — Abraham Shafi, CEO and Co-Founder of IRL.

Ex-IRL Employee Speaks out

Even while Shafi was assuring staff the company had the funds to extend their runway well into 2024, the SEC opened an inquiry into the company in late 2022 for violating securities laws and misleading investors.

In April, a former employee filed a lawsuit against IRL. In it, they alleged the company’s user base was grossly inflated by fake accounts and that they were penalized for openly speaking about it. Shafi was suspended by the Board in the same month.

Finally, the board of directors led an internal investigation into the misconduct of the CEO and confirmed staff allegations that 95% of users were bots or automated in some way.

IRL Shutdown Confirmed by Board

The Board has since confirmed they will be dissolving IRL and liquidating its assets.

“The shareholders elected to take this action—proposed by the Board—as a result of a Special Committed investigation that found that 95% of identified users were in fact automated or from bots, not authentic human users among other findings…Based on these findings, a majority of shareholders concluded that the company’s going forward prospects are unsustainable.” — Elliot Sloane, IRL spokesperson.

The IRL app has been removed from the iOS app store (it is still available in the Google Play Store for Android phones) and the homepage displays a message stating that IRL will be turned off on June 27th at 12pm PDT.

The parent company, Live Awake, appears to still be active and it also operates the meme-making app Memix. However, Shafi ended his connection with Memix in June 2023, according to his LinkedIn bio.

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Written by:
Jeremy is fascinated by nascent technology and how we use it to innovate as well as how we integrate it into our daily lives. He has covered the major tech trends of recent years including blockchain, cryptocurrency, fintech, AI, SaaS, and IoS. He has written extensively for global brands, major media outlets, SMEs, and education institutions. He has also advised and worked closely with several tech startups as they develop their brand voice and go-to-market strategies.
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