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Social Media App IRL Shuts Down as Internal Investigation Reveals Overwhelming Presence of Bots

A message posted on the IRL website confirmed that the app would cease operations starting on June 27, 12 pm west coast time.

IRL, the social media app designed to facilitate real-world event discovery, is shutting down following an internal investigation that revealed a significant portion of its user base consisted of automated accounts or bots. The board of directors conducted the investigation and found that over 95 per cent of the approximately 20 million users claimed by the six-year-old company were not real, as initially reported by The Information.

Initially, IRL aimed to cater to Gen Z users seeking genuine offline experiences. However, it soon shifted its focus to online events like livestreamed concerts, esports events, and Zoom parties in response to the COVID-19 pandemic. Despite the pivot, the app’s founder and CEO, Abraham Shafi, faced allegations of misconduct and was suspended two months ago before eventually stepping down.

The revelation of the inflated user numbers dealt a significant blow to the app’s credibility. As a result, a majority of shareholders concluded that the future prospects of the company were unsustainable. A spokesperson for IRL stated, “Based on these findings, a majority of shareholders concluded that the company’s going forward prospects are unsustainable.”

A message posted on the company’s website confirmed that the app would cease operations starting on June 27, 12 pm west coast time.

IRL’s journey toward its eventual shutdown can be traced through key milestones. The app was launched in 2017 by Abraham Shafi and Scott Banister, an early board member of PayPal. In June 2021, IRL achieved unicorn status with a valuation surpassing $1 billion after a $170 million Series C funding round led by Softbank’s Vision Fund 2, boasting a user count of 12 million at the time.

Doubts about the accuracy of the 20 million user figure began to emerge in May 2022, with some employees expressing skepticism. The company downsized its staff by 25 per cent in June 2022, cutting 25 positions. However, Shafi reassured employees in a company-wide memo that IRL had sufficient funds to sustain operations well into 2024.

In December 2022, the U.S. Securities and Exchange Commission (SEC) investigated IRL, probing whether the company misled investors. Subsequently, in April 2023, former IRL employee Nicholas Grant filed a legal complaint alleging that he and others were fired in retaliation after raising concerns about the inflated metrics. This led to the suspension of Abraham Shafi by a special committee of IRL’s board of directors, who later stepped down.

IRL employees have now been notified of the imminent shutdown, marking the end of the company’s troubled journey.

The case of IRL joins a list of startups that have faced criticism for inflating user metrics. Companies such as Triller, Block (formerly Square), Ozy, and Frank have all been accused of misleading investors or exaggerating their user numbers, raising concerns about transparency and accountability within the tech industry.

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