There’s been a lot of bad news about startups on social media lately. Several companies have shut down, including Twitter alternative Post News and IRL. ShareChat’s valuation fell by more than 50% after its latest funding round. But amid the negative headlines, the recent exit of French social network BeReal appears to be a bright spot.
BeReal, which alerts users that they have two minutes to “be real” by taking a frontal photo and a selfie, was acquired by Voodoo, a French mobile game and unicorn app, for €500 million ($537 million) this week. .
This deal values BeReal at a slight discount from its last valuation of $587 million in April 2022. BeReal has raised capital from venture firms, including Accel, Andreessen Horowitz, and Coatue, among others. The startup currently has 40 million active users, half of whom use the app at least six days a week, according to a press release regarding the acquisition. Reports indicate that the number of daily users is around 25 million.
Despite the company’s popularity, its user growth has largely plateaued in recent months, and BeReal was not in a good financial position prior to this deal. In March, at an all-hands meeting, BeReal employees were told this The company only has about 10 months of runway left You will either need to collect or acquire more to continue, according to Business Insider.
Well, the company got its wish.
The relationship between Voodoo and BeReal began years ago when Voodoo helped BeReal expand to the United States, Alexander Yazdi, co-founder and CEO of Voodoo, told TechCrunch. Yazdi added that BeReal is the only social media platform he currently uses.
He also said he’s aware of the difficulties the company has had recently to grow its users, especially amid declining user numbers in the US, but he’s confident the core product is good enough to sustain the company — it just needs a few new features and a little help, he says.
“BeReal is the most successful social media outlet created in the last eight years,” Yazdi said. “They’ve created something truly unique. Their success has shown that users really crave more authenticity. They have 40 million users and the vast majority of them post six days a week. This is a strong foundation and a foundation to build on.”
Yazdi said Voodoo, which has built three social networks of its own, is the ideal partner to “write the next page of the story.” Yazdi said they plan to roll out features such as messaging and video on the platform as a way to boost user engagement.
He also said they plan to integrate ads into users’ feeds. BeReal hasn’t been able to monetize yet, but Yazdi said it will fit BeReal’s mission of authenticity and will be designed to not cause inconvenience to users.
There is a lot of good in this deal. Firstly, this is likely the only way BeReal will be able to continue operating, and as someone who still uses it on a regular basis, that’s worth celebrating on its own. So anything that gives BeReal the capital and support it needs to address some issues and perhaps get back on the path of growing users, while also starting to generate revenue, seems like the best-case scenario for a startup that could very easily get stuck and have to shut up shop.
Plus, Voodoo seems like a sweet spot for the app. The company has built and operates its own social platforms, and Yazdi is passionate about the actual product. This is not what a typical acquisition looks like, as the company experiences stunted growth and financial struggles.
I’m a little hesitant about the company’s monetization plans. Making money through ads is a natural option for social media companies, but I’m concerned about how existing users feel about ads, which are the complete opposite of “authentic” photos of their friends, and whether that might put a damper on the company’s plans to entice users. People come back.
Although I realize that social media startups only have a few ways to monetize, most people are not willing to pay for it; X has discovered this time and time again. It seems that users do not like the increasing number of Advertisements on X or Instagram also. I’m also not sure that adding chat or the ability to post video will be enough to convince users to come back, especially if they return to an ad-threaded feed.
But Yazdi is confident the company will return to growth because of how different its strategy is. He says it will be a challenge to get BeReal to where they want it to be, but it’s worthwhile, while keeping the startup’s “mission” at heart.
“We will never break this DNA of authenticity,” Yazdi said. “This is BeReal. We will not touch this DNA.”
Users will be the judge of that.