Photo-sharing app BeReal acquired by Voodoo for €500mn

Photo-sharing platform BeReal has been scooped up by video game and app developer Voodoo for €500mn, in a French tie-up that comes as the government beefs up its technology ambitions.

Voodoo plans to launch paid advertising on BeReal in an effort to move the company towards profitability, its chief executive Alexandre Yazdi told the Financial Times, adding that it wanted to expand the company’s active user base.

The takeover was advised by JPMorgan and is the biggest in Voodoo’s history. Aymeric Roffé, head of Voodoo-owned social media app Wizz, will become chief executive of BeReal, while Alexis Barreyat, who founded the platform in 2019 aged 26, will remain “actively involved”.

Jean de la Rochebrochard, a BeReal board member and partner at Kima Ventures, an investment company co-founded by French billionaire Xavier Niel, called the sale “a wise decision”, especially as big financing rounds had become rarer while investors focused on the much-hyped artificial intelligence sector.

BeReal promotes authenticity on its platform in contrast to the filters and editing commonplace on rivals such as Snapchat and Instagram. The Paris-based tech company, however, has largely stagnated in terms of user growth since 2022 when its popularity surged among teenagers and young adults.

The acquisition came on the same day that one-year-old Mistral AI, another French start-up, raised €600mn for an almost €6bn valuation as it seeks to grow from being a national champion to competing on the global tech stage. That deal was the biggest yet for a start-up based outside Silicon Valley that is building large general-purpose AI models.

BeReal has in the past been financed through venture capital, raising a total of $90mn, according to data provider Crunchbase.

BeReal’s monthly active users have held steady at about 50mn since the end of 2022, according to data from market intelligence company Sensor Tower. Downloads, however, tumbled from a peak of about 35mn in the third quarter of 2022 to 5mn in the three months to March this year. 

“We think advertising is necessary for the business model of a social media platform,” said Yazdi. He emphasised that adverts would be integrated in an “extremely fluid” format to avoid “damaging the user experience”.

Rival platform Instagram, owned by Meta, introduced paid advertising in 2013, three years after it first launched.

BeReal users are notified once daily to take a snapshot using both the front and back cameras of their phone. They can unlock additional “posts” by uploading their images within an allotted two-minute time window immediately after the notification.

Users can only see others’ images after sharing their own, which Yazdi said made BeReal an “uncommon” social network where all users were actively engaged.

Although growth has slowed significantly, Yazdi said the majority of BeReal’s users still logged in at least six days a week, making it an “impressive” prospect for expansion and monetisation.

BeReal’s team had “concentrated their efforts on growing and developing a global user base” but would now need to seek a “balance between monetisation and product development”, he added.

BeReal’s user base, mostly young people from Generation Z, is primarily concentrated in the US, France and Japan. Yazdi acknowledged that growth had slowed, in particular in the US, and said he would focus on “regaining confidence” in existing markets and expanding elsewhere in Europe and Asia.

The push towards an advertising-based business model comes after the company explored the idea of a subscription model at the height of its popularity. However, experts say this is hard to pull off, particularly for platforms targeting users who have less disposable income.