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BeReal’s Struggle for User Growth Sparks Consideration of Series C or Sale

ByHuey Yee Ong

Mar 18, 2024
BeReal's Struggle for User Growth Sparks Consideration of Series C or Sale

BeReal’s Struggle for User Growth Sparks Consideration of Series C or Sale

BeReal, the French social media platform known for its genuine approach to sharing moments, is facing a critical moment. Despite its early success, the app’s growth has stalled, with its daily active users (DAUs) remaining at 25 million since last year. This situation presents a major challenge for the company as it considers its next moves during uncertain times.

Founded in Paris by Alexis Barreyat and Kévin Perreau, former GoPro employees, during the height of the Covid pandemic in 2020, BeReal carved out a niche by encouraging users to post unfiltered selfies twice a day, capturing the ordinary and extraordinary aspects of their daily lives. This concept set BeReal apart as a genuine alternative to the polished presentations often seen on platforms like Instagram.

What’s Stalling BeReal’s Growth?

Maintaining momentum in the fiercely competitive social media landscape has proven challenging. Insiders reveal that BeReal is considering a Series C funding round to sustain operations before its $90 million in funding depletes. The company, which closed a $60 million Series B funding round at an estimated $600 million valuation in late 2022, faces lukewarm investor interest and the prospect of being acquired. The decision comes at a time when the European growth funding market is experiencing a broader slowdown, impacting tech startups across the board.

BeReal’s user base, while having shown some growth since 2022, remains unchanged from the previous year, signaling a growth impasse. In response, the company has introduced new features such as official accounts, groups, messaging, and video capabilities in hopes of revitalizing user engagement. Despite these efforts, significant growth remains elusive, with only Japan emerging as a promising market for new users and engagement within the Asia-Pacific region.

The struggle to sustain growth is not unique to BeReal; the social media sector has seen other platforms like Clubhouse and Gas face similar challenges post-pandemic. Clubhouse, once valued at $4 billion, is now struggling, while Gas was acquired and subsequently shut down by Discord. Even established platforms like Snapchat are finding it difficult to recover from the pandemic’s impact on growth.

Innovating for Survival

BeReal’s leadership is prioritizing the development of new features to attract potential investors for its Series C funding round. The company is also contemplating hiring additional engineers to expedite these developments. However, any new funding could potentially come at a lower valuation, known as a down round, reflecting the company’s current challenges.

In an all-hands meeting in February, CEO Alexis Barreyat and COO Romain Salzman, along with other executives, disclosed to employees that the company had approximately ten months of operational runway left. This revelation underscores the urgency for BeReal to decide whether to pursue additional funding to maintain its independence or to consider acquisition offers, which have been mentioned but not detailed.

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Featured Image courtesy of Jakub Porzycki/NurPhoto via Getty Images

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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