There has been a lot of bad news about startups on social media currently. Many businesses, including alternatives Twitter Post News and IRL, have closed. ShareChat’s valuation dropped by greater than 50% after the latest funding round. However, amid the negative headlines, the recent exit of French social network BeReal appears to be a brilliant spot.
The BeReal app, which alerts users that they have two minutes to “be real” by taking each a frontal photo and a selfie, was acquired this week by Voodoo, a French mobile game and unicorn app, for 500 million euros ($537 million ). .
This transaction sees BeReal’s valuation barely reduced from its last valuation of $587 million in April 2022. BeReal has raised capital from enterprise capital firms including Accel, Andreessen Horowitz and Coatue, among others. The startup currently has 40 million lively users, half of whom use the app at least six days a week, based on a press release about the acquisition. Reports estimate the day by day user count to be around 25 million.
Despite the company’s popularity, its user growth has largely stalled in recent months, and prior to this deal, BeReal was not in great financial shape. BeReal employees were told this at a multilateral meeting in March the company only has about 10 months of runway left According to Business Insider, it will either need to boost more or be acquired to proceed operating.
Well, the company got its wish.
The relationship between Voodoo and BeReal began many years ago when Voodoo helped BeReal expand into the United States, Voodoo co-founder and CEO Alexandre Yazdi told TechCrunch. Yazdi added that BeReal is currently the only social media platform he uses.
He also said he’s aware of the company’s recent efforts to grow user numbers, especially amid declining U.S. sales, but he’s confident the core product is ok to sustain the company — it just needs a few latest features and a little help, he says .
“BeReal is the most successful social media platform in the last eight years,” Yazdi said. “They really created something special. Their success showed that users really wanted more authenticity. They have 40 million users and the vast majority post six days a week. It is a strong point of reference and a foundation on which to build.”
Yazdi said Voodoo, which has built three of its own social networks, is the perfect partner to “write the next page of history.” Yazdi said he plans to implement features similar to messaging and video on the platform to extend user engagement.
He also said they plan to include ads into users’ feeds. BeReal has not yet turned a profit, but Yazdi said they will probably be in line with BeReal’s mission of authenticity and will probably be designed to not disturb users.
There is a lot of good in this deal. First of all, this is probably the only way BeReal will have the ability to proceed operating, and as someone who still uses it usually, it’s value celebrating alone. So anything that offers BeReal the capital and support it must iron out some of its issues and potentially get back on track with growing users, while also beginning to generate revenue, looks as if the best-case scenario for a startup that might easily just have to shut up shop.
Other than that, Voodoo looks as if a good home for the app. The company has built and runs its own social media platforms, and Yazdi is passionate about the product itself. This is not what a typical acquisition looks like, where a company experiences stunted growth and financial problems.
However, I’m a little more undecided about the company’s monetization plans. Monetizing promoting is a natural alternative for social media firms, but I worry what existing users will think of ads that are the exact opposite of “authentic” photos of their friends, and whether it could thwart the company’s plans to lure people back.
While I understand that social media startups only have so many ways to make money, most individuals are not willing to pay for it because X has found this out many times. Users don’t seem thrilled with the rising numbers ads on X Or Instagram or. I’m also unsure that adding chat or the ability to post videos will probably be enough to maintain users coming back, especially if they return to the ad-supported feed.
However, Yazdi is confident that the company will return to growth because of how truly differentiated its strategy is. He says getting BeReal where they need will probably be a challenge, but a worthy one, while maintaining the startup’s “mission.”
“We will never break this DNA of authenticity,” Yazdi said. “This is BeReal. We will not touch this DNA.”
Users will judge this.