Venture capital investors have sniffed out an opportunity. BeReal raised $30 million in a series A round last year, led by Andreessen Horowitz, an elite Silicon Valley investment firm. Accel Partners, New Wave and Yuri Milner’s DST Global joined the deal.
The company is on the hunt for another $85 million that will value it at $600 million, likely led by Mr. Milner’s fund, Business Insider reported.
The billionaire was previously an early investor in Facebook and Twitter. Milner, a Russian-Israeli investor, has lived in Silicon Valley for years and became known for his early bets on Facebook and Twitter.
BeReal’s founders have kept a low profile and the company declined an interview request. A spokesperson said the app was launched “in response to a feeling that today’s social apps are doing everything else but connecting us with our friends and family.”
The spokesperson added: “Alexis Barreyat founded BeReal to keep in touch with his friends. It is a place where real life is captured, free from the need to create, cultivate and accumulate influence.
“By not focusing on followers, likes and filters, BeReal connects users with spontaneity and authenticity.”
While its viral popularity has drawn comparisons to Instagram, BeReal could also find itself joining the graveyard of resourceful social media upstarts that have fizzled out of mainstream use.
Houseparty, a social video chat app that flourished during the early months of the coronavirus pandemic, closed last year after its popularity faded. YikYak, a pseudonymous chat app, exploded on college campuses in 2013 and was once valued at $400 million. It was later closed, although it was relaunched last year. Periscope, a video streaming app acquired by Twitter, was shut down in 2021. Even Alphabet’s endless resources couldn’t make Google Plus, its attempt to rival Facebook, a success.
BeReal also faces competition from Instagram, which has already started testing IG Candid. This feature encourages users to take a timed photo once a day. Matt Navarra, a social media consultant, said this could be a sign that Instagram sees BeReal as a “threat”. Meta says that IG Candid is “an internal prototype” and may never be widely released.
BeReal’s challenge comes as Instagram faces backlash from its own users, who are frustrated by changes to the social network. Users have complained that Instagram has been inserting videos into their app feeds, instead of photos. It has also been showing them more content from strangers, rather than their friends.
A redesign of the app was partially pulled after backlash from famous users, including Kylie Jenner and her 360 million followers. Instagram has insisted that it plans to continue showing more videos, arguing that its data shows this is what users are engaging with.
The changes are seen as an effort by the Meta-owned app to sidestep its biggest rival, Chinese video-sharing app TikTok.
But by doing so, you risk turning off current Instagram users and funneling them towards BeReal.
“BeReal is riding the anti-Instagram wave,” adds Navarra, “and leaning on Generation Z’s desire for more authentic experiences on social media.”
The data collected and transmitted by BeReal has raised the concern of some parents. Jo Thornbury, from Malmesbury, Wiltshire, whose teenage son uses BeReal, is mostly supportive of the app, but adds that “the only drawback is that the geolocation is displayed every time you choose to post.” Users are prompted to share their location, although they can choose not to.
BeReal also collects location data and contact data when users sign up, according to cybersecurity experts at VPNOverview.
Tech news site The Information also points to a trend of people posting on their desktops, risking sending private or personal information to a large group of friends that should be kept secret.
There have been questions about how much of the BeReal hype is being driven organically and how much marketing is costly. The Brown University student newspaper reported that student ambassadors were paid $30 for each friend they could get for downloading the app. The company has a US “varsity team” seeking “ambassadors to host parties, manage a marketing budget and identify key moments on campus,” which will run through November.
So far, it’s unclear how the app will make money. It does not yet sell ads or have paid features.
Still, it highlights the demand for alternative apps to Big Tech’s current set of social media offerings. “There’s clearly an appetite for smaller, more intimate platforms,” says Nayana Prakash, a researcher at the Oxford Internet Institute.
The problem, he notes, is that older millennial users joining the app could quickly erase BeReal’s popularity. “Facebook quickly fell out of fashion once older people, meaning parents, started joining in,” she says.
TikTok, now used by a billion people, has managed to attract a younger demographic under 24, where Facebook and Meta-owned Instagram are struggling.
“The main test for BeReal is whether it can stay interesting and relevant to young people,” says Prakash.