It was two years ago that IRL, an app for messaging apps, seemed to be on the rise. It boasted of You can find out more about it here. “unicorn” status has hit a $1.2b valuation after a $170m Series C financing round, led by SoftBank Vision Fund 2.
“We have the opportunity to build WeChat for the rest of the world,” Shafi told The Verge, 2021. This is a reference to the Chinese messaging app that boasts more than 1 billion users.
Today, SoftBank You can learn more about it here. suing IRL for $150 million after the startup’s board concluded that 95% of the company’s users were fake, or “from bots.” IRL has announced its closure. Now, the website has been updated with these words: “We loved doing more together on IRL.com,” You will also receive a notification that “IRL has shut down.”
SoftBank IRL allegedly used bots to boost users’ data using a proxy and then hired a company in order to conceal the scam. The complaint reads: “Because IRL did not have any profitable revenue stream, its value to an outside investor like SoftBank depended on its active user metrics as a source of potential future income. Thus, SoftBank relied on the accuracy of representations from IRL’s executives concerning both the quantity and quality of IRL’s users.”
Recent news All-In Podcast episode: Venture capitalists give their thoughts SoftBank’s IRL woes and the need for Strongly Recommended due diligence.
“The number one part of diligence, I’d say for us—other than looking at metrics, which anyone can do—is the off-sheet references: talking to customers from a list that you figured out yourself, not from the company itself,” David Sacks said, a General Partner at Craft Ventures.
Chamath Palihapitiya founded Social Capital, a VC company in 2011. He cited insufficient checks and balanced and what he considered to be a lack of transparency. “deeply inexperienced” VCsWho said he? “don’t even know how to ask the basic questions or—even more insidiously—you don’t have the courage to say the hard thing. And so these things happen that are frankly inexcusable.”
Angel investor Jason Calacanis said that a major role in VC is “asking uncomfortable questions and doing uncomfortable diligence … You can trust the founders, but you have to verify that the data you have is correct.”
The Sunday Review “Reach out” SoftBank for Comment but no response immediately
This May SoftBank posted It recorded investment losses in the Vision fund of almost $40 billion. The fund also invested in what Masayoshi son, the founder of Vision funds, called “defense mode,” Stopping new investments made by funds.