SoftBank once invested in social app IRL at a $1.1 billion valuation. Now, the Japanese investment firm is suing the defunct company for fraud, alleging $150 million in damages.
IRL was supposedly poised to become an event organizing alternative for Gen Z, who are using Facebook less and less. Its self-reported numbers were impressive enough to solicit a $170 million Series C led by SoftBank in 2021, but earlier this summer, an internal investigation by IRL’s board of directors found that 95% of the app’s users were fake.
In its legal complaint, SoftBank explains that it was moved to invest in IRL because of its impressive user numbers; the app claimed it had been downloaded by 25% of U.S. teens under 28 years old and was growing at a 400% year-over-year rate. But per the IRL board’s investigation, none of these figures were accurate.
Investors don’t always do …
