There has been a lot of bad news about social media startups lately. Several companies, including twitter alternative Post News, and IRL have closed. And ShareChat's valuation has fallen more than 50% after a recent funding round. But amid the negative headlines, the recent departure of French social network BeReal seems like a bright spot.
BeReal, which alerts users that they have two minutes to “be real” by taking a head-on photo and a selfie, was acquired by Voodoo, a French gaming and mobile app unicorn, for €500 million ($537 million). ) this week. .
This deal values BeReal at a minor cut from its last valuation of $587 million in April 2022. BeReal 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. Reports put daily users at around 25 million.
Despite the company's popularity, its user growth has largely stagnated in recent months and BeReal was not in good financial shape prior to this deal. In March, at a general meeting, BeReal employees were told that The company only had about 10 months of runway left. and would need to raise more or be acquired to move forward, 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 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 that he is aware of the company's recent difficulties in increasing its number of users, especially amid a downturn in the US, but is confident that the base 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 network created in the last eight years,” said Yazdi. “They have really created something unique. Its success showed that users were really craving more authenticity. They have 40 million users and the vast majority publish six days a week. That’s a solid foundation and foundation to build on.”
Yazdi said Voodoo, which has created three social networks of its own, is the perfect partner to “write the next page of the story.” Yazdi said they plan to implement features like messaging and video on the platform as a way to boost user engagement.
He also said they plan to incorporate ads into users' feeds. BeReal had yet to monetize as of yet, but Yazdi said they will conform to BeReal's mission of authenticity and will be designed not to upset users.
There are many good things in this agreement. On the one hand, it's probably the only way BeReal can continue to operate, and as someone who still uses it regularly, it'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 generate revenue, seems like a best-case scenario for a startup that I very easily could have done it. He had to close the store.
Plus, Voodoo seems like a good home for the app. The company has created and manages its own social platforms and Yazdi is passionate about the actual product. This is not what a typical acquisition looks like, where a company experiences stagnant growth and financial difficulties.
However, I'm a little more hesitant about the company's plans to monetize. Making money through ads is a natural choice for social media companies, but I'm worried about how existing users will feel about ads – the exact opposite of “authentic” photos of their friends – and whether that could ruin the company plans to attract people back.
While I understand that social media startups have many ways to monetize, most people are not willing to pay for it since twitter-celebrities-no-thanks-twitter-blue” target=”_blank” rel=”noreferrer noopener”>x has found out repeatedly. And users don't seem to like the growing number of x-users-fed-up-with-constant-stream-of-malicious-crypto-ads/” target=”_blank” rel=”noreferrer noopener”>ads in x either instagram-users-delete-app-unskippable-ads/1877117″ target=”_blank” rel=”noreferrer noopener”>instagram any. I'm also not sure that adding chat or the ability to post videos is enough to persuade users to return, especially if they return to an ad-filled feed.
But Yazdi is confident the company will return to growth thanks to how differentiated its strategy really is. He says it will be a challenge to get BeReal where they want, but it will be worth it, while keeping the startup's “mission” at heart.
“We are never going to break that DNA of authenticity,” Yazdi said. “This is the BeReal. “We are not going to touch that DNA.”
Users will be the judge of that.
