A Messaging App With a $1.17B in Valuation Shuts Down After Investigation Finds 95% of Users Were 'Bots' IRL once boasted nearly 400% growth experienced over 15 months. However, that wasn't the whole truth.

By Madeline Garfinkle

T. Schneider | Shutterstock
IRL is shutting down after an investigation found 95% of users were bots or automated.

IRL (short for "In Real Life") had big plans for the future of social network messaging. The concept hinged on the idea that IRL would facilitate more in-person meetups and events through shared calendars, polls, public community pages, and more.

In June 2021, nearly two years after launching, IRL announced 400% growth over a 15-month period, more than $200 million in funding, and that it achieved "unicorn status" with a $1.17 billion valuation (unicorn status refers to companies that reach $1 billion in valuation without being on the stock market).

"That's a remarkable amount of money for an app with roughly 12 million monthly users and no revenue," The Verge reported at the time, ironically foreshadowing the news that's just come to light — IRL did not make money, and almost all of its users were fake, The Information reported on Friday.

Related: Millennial App Founder Arrested for Fraud in $175 Million JPMorgan Deal Pleads Not Guilty

Following an SEC investigation (which was initiated in December 2022), a spokesperson for IRL told the outlet that 95% of the app's "20 million" users were "automated" or "bots."

"Based on these findings, a majority of shareholders concluded that the company's going forward prospects are unsustainable," the spokesperson said, adding that IRL would be shutting down, per Fortune.

The collapse of the once-supposedly promising venture comes after a string of problems that arose earlier this year. In April, Nicholas Grant, a former employee at IRL, filed a complaint against the company, claiming it retaliated against him after voicing skepticism and concern over the accuracy of IRL's user numbers.

That same month, IRL's board of directors suspended CEO and co-founder, Abraham Shafi, following a report of an alleged "pattern of misconduct," The Information reported. Shafi stepped down as CEO following the allegations.

Madeline Garfinkle

Entrepreneur Staff

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Editor's Pick

Related Topics

Business News

Opening a New McDonald's Franchise Will Be More Expensive in 2024

Starting January 1, franchise royalty fees will rise from 4% to 5% for new locations in the U.S. and Canada.

Business News

'Bar Tab Was Almost 80%': Restaurant Slams Well-Known Columnist After He Goes Viral For Claiming His Meal Cost $78

A photo of a burger and fries from 1911 Smokehouse BBQ at Newark Airport went viral for its alleged price, but the restaurant says the man didn't factor in his many alcoholic drinks.

Money & Finance

Want to Become a Millionaire? Follow Warren Buffett's 4 Rules.

Too many entrepreneurs are counting too heavily on a company exit for their eventual 'win.' Do this instead.

Business News

Here's the Secret to Growing Your Small Business, According to Execs at UPS, Airbnb, Mastercard, and Other Big Brands

These 10 executives work at big companies, overseeing programs that help small business. Here's the advice they wish all small business owners were getting.

Business News

Is Your Relationship With Your Work at a Breaking Point? You're Not Alone, Survey Finds

In a new survey by HP, 83% of unhappy workers said they are willing to earn less to be happier at their job.

Business News

'An Absolute Prize': Rare Great Depression $10,000 Bill Sells For Nearly $500,000

The $10,000 bill is from 1934 and was never in circulation.