A former employee is alleging in a lawsuit that Bay Area social media startup IRL retaliated against him after he raised concerns about the company's user growth numbers, according to a report.
Nicholas Grant filed a lawsuit in the U.K., The Information reported on Thursday, and in the complaint, alleged that IRL laid him off in February after he and other colleagues questioned the accuracy of the startup's active user numbers.
IRL was co-founded in 2016 by CEO Abraham Shafi as a social networking site that revolved around events and other activities. The name of the company is a common shorthand for saying "in real life."
The startup has raised nearly $200 million, including a Series C round led by Softbank in 2021 that injected $170 million into the company and valued it at more than $1 billion.
In June 2021, IRL told the Business Times that the company had 12 million users, which represented 10X growth over just eight months.
Those numbers were inflated, according to the lawsuit.
By early 2022, IRL was telling investors that its user base had grown to 20 million but a third-party data firm that tracks social media use pinned the number closer to 1 to 2 million, according to The Information.
In the complaint, Grant alleges that the inflated numbers were showing up on internal dashboards that he accessed as a software engineer at the company, and that he also noticed erratic swings in the data with millions of users suddenly appearing or disappearing in various regions around the world.
This meant that IRL was using “millions of ‘bots’," the complaint said, and meant that “the customer/user base has been substantially, wrongly, unlawfully ‘bloated,’” according to The Information.
IRL did not respond to a request for comment.
