According to a report from The Information, once buzzy social app IRL has been shut down by investors, after raising $200M from SoftBank’s Vision Fund, Founders Fund and others. IRL’s spokesperson said an investigation by the board of directors concluded 95% of those users were “automated or from bots. Based on these findings, a majority of shareholders concluded that the company’s going forward prospects are unsustainable.” The company is being shut down and the unspent money will be returned to the investors.
Well, how come I am not surprised? I downloaded the IRL app and I wasn’t impressed. Sure, I am 45+ years old so I am not their target audience. But this app didn’t have viral components or addictive content. So I couldn’t quite understand how they acquired so many millions of users. It turned out the impressive user count was mostly from bots. Their investors probably didn’t do very thorough due diligence but IRL’s management team obviously cheated so it was hard to catch. I believe tech investors are back to doing very long and thorough diligence and the fast and furious style investing in 2020-2022 is over, which is good considering all the shenanigans brought by the easy money era. Prudence is back and it’s generally a good thing.