SoftBank slams social media startup it invests in for using bots to pretend to be real users, sues

Vision Fund, a subsidiary of SoftBank Group, filed a lawsuit on August 6, accusing the founder of the social media startup IRL in which it invested artificially inflated user data, lied to the fund and defrauded the fund of millions of dollars

IRL is a popular social media application for Generation Z, launched in April 2021. According to the complaint, the app appears to be one of the fastest-growing social media apps for Generation Z. SoftBank invested $150 million (approximately 1.077 billion yuan) in IRL in May 2021, including purchasing $125 million in shares from the company and $25 million in shares from CEO Abraham Shafi and other insiders . At the time, SoftBank estimated that IRL had 12 million monthly active users

, but the lawsuit alleges that these figures were false. IRL secretly uses a large number of bots to create a seemingly prosperous social network, but in fact it is to "deceive investors." The conspiracy began to unravel when the SEC opened an investigation into IRL in late 2022. In April 2023, Abraham Shafi was suspended as CEO and the company was dissolved in June.

The lawsuit raised questions about SoftBank’s level of scrutiny of its investment companies. When third-party assessments of user data fell far short of IRL's self-advertisement, SoftBank representatives accepted Abraham Shafi's explanation and said those assessments were "categorically inaccurate." SoftBank has made some mistakes in the past, including taking large stakes in allegedly fraudulent cryptocurrency exchange FTX and devalued real estate company WeWork. It lost $32 billion in the entire year and has been underperforming since the market high in 2021

The articles on this site contain external jump links to convey more information and save selection time, but Results are for reference only and all articles are accompanied by this statement

The above is the detailed content of SoftBank slams social media startup it invests in for using bots to pretend to be real users, sues. For more information, please follow other related articles on the PHP Chinese website!