There has been a lot of bad news for social media startups lately. Several companies, including Twitter alternative Post News, and IRL have shut down. And ShareChat’s valuation is down more than 50% after a recent funding round. But amid the negative headlines, the recent exit of French social network BeReal looks like a bright spot.
BeReal, which notifies users that they have two minutes to “be real” by taking a front-facing photo and a selfie, has been acquired by Voodoo, a French mobile game and app unicorn, for 500 million euros ($537 million). this week. .
This deal values BeReal at a small haircut 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 about the acquisition. It reports that daily users are around 25 million.
Despite the company’s popularity, its user growth has largely accelerated in recent months, and BeReal wasn’t in great financial shape before this deal. In March, at an all-hands meeting, BeReal employees said this the company was only about 10 months from the runway and would have to either raise more or be acquired 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 into the US, 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 struggles to grow users, especially amid the downturn 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 that has been created in the last eight years,” said Yazdi. “They have really created something unique. Their success showed that users really craved more authenticity. They have 40 million users and the vast majority post six days a week. This is a strong foundation and foundation to build upon.”
Yazdi said Voodoo, which has built three social networks of its own, is the perfect partner to “write the next page of history.” Yazdi said they plan to make features like messaging and video available on the platform as a way to boost user engagement.
He also said that they plan to embed ads into users’ feeds. BeReal had yet to monetize them so far, but Yazdi said they would fit BeReal’s mission of authenticity and be designed to be user-friendly.
There is a lot of good in this deal. First, it’s probably the only way BeReal could continue to function, and as someone who still uses it regularly, that’s worth celebrating in itself. So anything that gives BeReal the capital and support it needs to address some issues and potentially get back on the path of growing users while also starting to get revenue seems like the best-case scenario for a startup that could very easily have just had to close up shop.
Plus, Voodoo seems like a nice home for the app. The company has built and runs its own social media platforms, and Yazdi is passionate about the actual product. This is not what a typical acquisition looks like, where a company sees stagnant growth and financial struggles.
However, I’m a bit more hesitant about the company’s monetization plans. Monetizing through ads is a natural choice for social media companies, but I worry about how existing users will feel about the ads, the exact opposite of their friends’ “authentic” photos, and whether this could put a problem in the company’s plans to lure people back.
While I understand that social media startups have so many ways to monetize, most people are not willing to pay for it as X has repeatedly discovered this. And users don’t seem to love the growing number of ads in X the Instagram either. I’m also not sure that adding chat or being able to post videos will be enough to keep people coming back, especially if they come back to a feed with ads.
But Yazdi is confident the company will return to growth because of how diversified its strategy really is. He says it will be a challenge to get BeReal where they want it, but worth it, while keeping the startup’s “mission” at the center.
“We’re never going to break that DNA of authenticity,” Yazdi said. “This is BeReal. We’re not going to touch that DNA.”
Users will be the judge of this.
