The riddle of the BeReal deal (2024)

In between Elon’s pay package, Apple’s developer conference, and the surprise end of Likes on X, something really weird happened this week: BeReal, the quirky social media app, was acquired by Voodoo, a mobile gaming company, for €500 million.

A social networking company acquisition? In 2024? Acquired by a gaming company? A half-billion dollar (or euro) price tag? Nothing about this seems normal.

So, let’s start with the price.

It may not exactly be the venture exit of, say, investor Andreessen Horowitz’s dreams. But keep in mind that BeReal’s peak valuation in 2022 was $600 million, which makes this…a pretty good outcome. Menlo Ventures partner Amy Wu is with me on this one.

“If you look at the history of social network outcomes, if they’re not large, by default you’re dead, right? Because they’re monetizing via advertising and unless you’re getting into the few-hundred-million range, advertisers just aren’t interested in that asset,” said Wu. “So, by default, most social networks are just dead and, therefore, to get a $500 million outcome, that’s pretty rare for a social network that doesn’t have that scale.”

And with users down the company’s 2022 peak (Voodoo says BeReal has 40 million active users, but that can mean a lot of things), BeReal only had so much time to make this exit happen. If users are leaving or stagnating, it’s ultimately a declining asset.

“BeReal is a classic example of a tech company that’s hit a growth plateau within its historical market/biz model and needs to pivot,” said Joe Endoso, CEO of investment platform Linqto, via email. “The problem is that it needs capital to do this and today’s VC funding environment for its vertical is still weak. So M&A is the only option. Otherwise they languish and die.”

So acquirer Voodoo is now on a clock to figure out what exactly to do from here, but, to be clear—Voodoo is in its own pivot from hypercasual gaming, so though its a surprising and possibly overpriced deal for them, BeReal could end up making sense in terms of luring stickier users.

But the deal is also a marker of a warming M&A exit market that could stand to get warmer still.

Rick Yang, NEA partner and head of technology, says the BeReal deal is indicative of a “sweet spot” for acquisitions at a time when regulatory scrutiny has made big-ticket tech deals hard to come by. “I’m surprised we haven’t seen more M&A in this range,” Yang says.

The next deal wave could be materializing as we speak, as all sorts of acquirers are out there right now looking at deals of this size, from Wiz to Databricks to Nvidia.

“We’ve certainly heard that corp dev teams are very actively looking at targets right now,” says Menlo Ventures’ Wu. “You have the 2021 wave of companies that have raised a lot of capital, and are now either needing to raise again or looking for homes. You have the first wave of AI companies to get funded that really can’t stay in the capital accumulation game, so they’re looking for homes. Then, companies are looking for talent, right? So, you have multiple M&A stories happening at once.”

If nothing else, perhaps BeReal brings this into sharp relief: that this is an industry about what’s hot and what’s not. This week, around the time BeReal’s buyout was announced, French AI juggernaut Mistral raised another €600 million at a valuation around €6 billion. It raises the question of whether BeReal’s outcome is evidence that outliers can come from any sector, or whether going against the grain is ultimately futile.

As hot as AI is right now, are we convinced that Mistral’s reasonable best-case scenario isn’t along the lines of a BeReal-sized exit? AI is moving so fast that products can become obsolete quickly, and AI business models are still a giant question mark. Naturally, Mistral’s investors think differently, but I’m personally less sure.

And, in the end, as exits go, BeReal is a reminder that M&A really isn’t that bad.

“It’s a good home for the company and, frankly, there’s a lot you can do with BeReal in the context of the broader ecosystem,” said Yang. “So, from an investor standpoint…it ended up not being what they had hoped for, but it’s not that bad. And the ultimate story for the company itself hasn’t been completely written yet.”

See you Monday,

Allie Garfinkle
Twitter:
@agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- AccountsIQ, a Dublin, Ireland-based cloud accounting platform, raised €60 million ($64.4 million) in Series C funding from Axiom Equity.

- Learn to Win, a Menlo Park, Calif.-based SaaS training platform, raised $30 million in Series A funding. The Westly Group led the round and was joined by Norwest Venture Partners and Pear VC.

- Findigs, a New York City-based rental screening and decision platform, raised $27 million in Series B funding. Nyca Partners led the round and was joined by existing investors RPM Ventures, Streamlined Ventures, Expa Ventures, Activant Capital, Colle Capital, and Frontier Venture Capital.

- FUZE Technology, a Los Angeles, Calif.-based IoT company, raised $11.5 million in Series A funding. Beverly Pacific led the round and was joined by Palm Tree Crew, Bain Capital Ventures Scout Fund, Dream Ventures, and others.

- IgniteData, a Wilmington, Del. and Maidenhead, U.K.-based patient data platform for clinical trials, raised $8 million in seed funding. SpringTide led the round and was joined by Oncology Ventures and others.

- Sidekick, a London, U.K.-based wealth management platform designed for modern investors, raised £4.5 million ($5.7 million) in seed funding. Pact VC and TheVentureCity led the round and were joined by MS&AD, Blackwood, 1818, and existing investors.

- Tern AI, an Austin, Texas-based developer of an AI-powered alternative to the GPS, raised $4.4 million in seed funding from Scout Ventures, Shadow Capital, Bravo Victor VC, and Veteran Fund.

- Zeta Labs, a San Francisco-based developer of AI bots capable of performing complex and multi-step tasks, raised $2.9 million in pre-seed funding. Daniel Gross and Nat Friedman led the round and Earlybird VC and others.

PRIVATE EQUITY

- Clearhaven Partners acquired Zixi, a Waltham, Mass.-based provider of live video software. Financial terms were not disclosed.

- NetSPI, backed by KKR, acquired Hubble, a Reston, Va.-based cyber asset attack surface management company. Financial terms were not disclosed.

EXITS

- Sony Pictures Entertainment acquired Alamo Drafthouse, an Austin, Texas-based chain of dine-in movie theaters, from Altamont Capital. Financial terms were not disclosed.

OTHER

- Pluxee agreed to acquire Cobee, a Madrid, Spain-based employee benefits platform. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- J.P. Morgan Private Capital, a team within J.P. Morgan Asset Management, raised $500 million for its first fund focused on life sciences companies.

PEOPLE

- FTV Capital, a San Francisco-based growth equity investment firm, hired Richard Earnshaw as partner. Formerly, he was with Hg.

- HGGC, a Palo Alto, Calif.-based private equity firm, hired Cecilia Kwan as chief financial officer. Formerly, she was with B Capital Partners.

Subscribe to the Fortune Next to Lead newsletter to get weekly strategies on how to make it to the corner office. Sign up for free before it launches on June 24, 2024.

The riddle of the BeReal deal (2024)

FAQs

Has BeReal fallen off? ›

Since its inception in December 2019, the photo-sharing app's popularity has rocketed from nonexistent to viral, before dropping off a cliff. And it's unlikely to make a comeback. BeReal was acquired in mid-June for €500 million, or about $535 million, by Voodoo, a French video game developer.

Did Facebook buy BeReal? ›

BeReal, the quirky social media app, was acquired by mobile gaming company Voodoo for €500 million. Voodoo CEO Alexandre Yazdi joins Ed Ludlow to discuss how they plan on helping with BeReal's vision https://trib.al/4bSNFeY.

What happened to BeReal in 2024? ›

BeReal was sold in June 2024 to Voodoo for about $540M19. BeReal's CEO and cofounder will leave the company.

Why is BeReal no longer popular? ›

A major downfall of the app from a brand POV is only being able to add up to 500 people to your account to view your BeReals,” Brianna Bajek, the social media specialist for hair-care brand Not Your Mother's. She said that the brand posts 2-3 times a week and hopes BeReal will allow for larger follower counts.

Is the BeReal app safe for 12 year olds? ›

The Bottom Line. BeReal may appear to be safer than other apps, but that doesn't mean kids shouldn't be monitored. Remind your child that pictures are not accurate portrayals of life, as anyone can seem flawless for a millisecond. There are risks of being contacted by predators.

Who is the CEO of BeReal? ›

As part of the sale to Voodoo, BeReal co-founder and CEO Alexis Barreyat is leaving the company after a transition period. He is being replaced by Aymeric Roffé, who is currently CEO of Wizz, a social media app owned by Voodoo.

Is BeReal a dating app? ›

BeReal. Quick reminder that BeReal is not a dating app. Instagram.

Is anyone still using BeReal? ›

BeReal Has 23 Million Active Monthly Users

But after that peak, the number of people using it each month went down to 23 million in 2024.

Why didn t my BeReal go off today? ›

If you can't see your latest BeReal, it's likely because you changed your time zone! Changing your time zone deletes your latest BeReal.

Is BeReal a flop? ›

As it turns out, that was only short-lived, with Business Insider reporting that BeReal is now stuck in a limbo of sorts, as user growth stalls and new initiatives, like a celebrity feed of daily updates, fail to gain traction.

How many users did BeReal lose? ›

According to data from app intelligence firm Apptopia, BeReal's daily active users nearly halved from October 2022 to February 2023, plummeting from 20 million to 10.4 million. Since then, the number of daily active users has declined even further, dropping to just under 6 million active users in March.

References

Top Articles
Latest Posts
Recommended Articles
Article information

Author: Jerrold Considine

Last Updated:

Views: 6301

Rating: 4.8 / 5 (58 voted)

Reviews: 89% of readers found this page helpful

Author information

Name: Jerrold Considine

Birthday: 1993-11-03

Address: Suite 447 3463 Marybelle Circles, New Marlin, AL 20765

Phone: +5816749283868

Job: Sales Executive

Hobby: Air sports, Sand art, Electronics, LARPing, Baseball, Book restoration, Puzzles

Introduction: My name is Jerrold Considine, I am a combative, cheerful, encouraging, happy, enthusiastic, funny, kind person who loves writing and wants to share my knowledge and understanding with you.