Documented cause
IRL (In Real Life) was founded in 2017 by Abraham Shafi in San Francisco as a social events discovery app — connecting friends around shared activities in the real world. Over the following years, the company pivoted toward group messaging and broader social networking, positioning itself as an alternative to Discord and Snapchat. In 2021, IRL raised a round led by SoftBank Group that valued the company at $1.17B, conferring unicorn status. The company reported 12 million monthly active users. These metrics, combined with Shafi's confident investor presentations and the ZIRP-era appetite for social app unicorns, enabled the $170M total raise. In June 2023, IRL abruptly shut down its app. The SEC launched an investigation into the company and its founder. The finding was unambiguous: approximately 95% of IRL's reported monthly active users were bot accounts or otherwise fake. Of the claimed 12 million MAU, investigators found that only approximately 100,000 to 300,000 were real human users. Abraham Shafi had raised $170M on the basis of user metrics he knew to be fabricated. The SEC charged Shafi with securities fraud. IRL became one of the most egregious examples of vanity metric fraud in the social app era — a company that raised capital as a unicorn while having fewer genuine users than a modestly successful Discord server. The $170M was consumed; investors received nothing.
Alternative account: IRL (In Real Life) raised $200M at a $1.17B valuation from SoftBank, Goodwater Capital, and others to build a social events and group messaging app. In June 2023, the SEC filed fraud charges against CEO Abraham Shafi, alleging that IRL had misrepresented user metrics: the app claimed 20M monthly active users, but an SEC investigation found 95% were bots or automated accounts, with genuine MAUs numbering in the hundreds of thousands. The company shut down immediately upon charges.