# IRL (2018 – 2023)

- URL: https://girisimcikafasi.com/en/startup-graveyard/irl/
- Sector: Social media
- Country: United States
- Total funding: $200 million
- Cause of closure: Regulation and legal issues

## What did it do?

IRL was a San Francisco-based social app that started as a calendar app for making it easier to plan events among friends and evolved into a messaging network built around group chats. It aimed to offer an events and groups product to a younger generation that barely used Facebook. In 2021 it became a unicorn at a valuation of $1.17 billion.

## Why did it shut down?

From 2022 onwards, the user numbers that had helped the company raise money were questioned by employees and by the SEC. An internal investigation by the board found that 95 per cent of the 20 million reported users were automated or originated from bots, and in June 2023 the company decided to shut down. SoftBank sued the company for fraud, claiming $150 million in losses. In 2024 the SEC, and in 2025 the Department of Justice, charged founder Abraham Shafi with misleading investors; Shafi had denied the allegations in earlier legal filings.

## The story

In June 2023, when IRL's board announced the findings of the internal investigation it had commissioned, the picture could be summed up in a single ratio: according to The Information, 95 per cent of the app's 20 million reported users were "automated or from bots". The social app, which had raised money at a $1.17 billion valuation in a SoftBank-led round two years earlier, soon announced it would shut down.

When Gather, the first venture Abraham Shafi tried in 2017, failed to take off, he made a fresh start in 2018 under the name IRL. The first product was a simple calendar that made it easier to plan small get-togethers with friends. When the pandemic halted real-world events, the app turned to online events and then became a messaging network built around group chats; Shafi said he aimed to build the Western equivalent of China's WeChat. In June 2021 a $170 million Series C led by SoftBank Vision Fund 2 made the company a unicorn. Founders Fund, Goodwater Capital, Floodgate and Dragoneer were also among the investors, and total funding passed $200 million. At the time the company said it had reached 12 million monthly active users.

Doubts grew in 2022. Employees began to question the user figures, the SEC began examining whether the company had misled investors, and in April 2023 the board put Shafi on leave. As it shut down, the company said it would return its remaining capital to shareholders. In August 2023 SoftBank filed a fraud lawsuit, claiming $150 million in losses. The founders, for their part, sued former investors and board members and denied the bot allegations.

In July 2024 the SEC charged Shafi with making misleading statements about the company's growth and concealing personal expenses paid with company cards. According to the SEC, growth presented as organic had been inflated by ads offering rewards in exchange for downloads, and this spending had been hidden through a third-party firm. According to a Fortune report from September 2025, the US Department of Justice also brought charges against Shafi of securities fraud, wire fraud and obstruction of justice. Shafi had denied the charges in earlier legal filings; the sources do not record any conviction on these charges.

The IRL case shows that, for consumer apps whose value rests almost entirely on a user metric, independent verification of that metric should be non-negotiable.

## Lessons

- Keep the active-user figure you present to investors verifiable from an independent data source, alongside your spending on advertising and incentivised installs.
- If you run incentivised install campaigns, book them clearly as marketing expenses and do not hide them in your investor deck.
- As an investor, get a written explanation, before the round closes, of any gap between third-party download data and the user numbers the company reports.

## Sources

- [Unicorn social app IRL to shut down after admitting 95% of its users were fake](https://techcrunch.com/2023/06/26/irl-shut-down-fake-users/)
- [Founder behind social media app IRL charged with fraud](https://techcrunch.com/2024/07/31/founder-behind-social-media-app-irl-charged-with-fraud/)
- [CEO who ran tech unicorn once valued at $1.2 billion charged with fraud after allegedly spending millions on his wedding and art classes](https://fortune.com/2025/09/04/tech-ceo-vcs-unicorn-irl-fraud-softbank/)
- [Calendar influencers? Event social network IRL raises $8M](https://techcrunch.com/2019/06/13/irl-calendar/)