The founder of social media app IRL faces federal charges for allegedly defrauding investors of $170 million during the company's 2021 unicorn funding round. Abraham Shafi, 38, was indicted on wire fraud, securities fraud, and obstruction charges after prosecutors say he concealed millions in user acquisition costs while spending investor funds on personal luxuries including his wedding.
The meteoric rise and spectacular fall of social media startup IRL just took another devastating turn. Abraham Shafi, the 38-year-old founder and CEO of Get Together (IRL's parent company), was indicted Wednesday by a federal grand jury in Oakland on charges of wire fraud, securities fraud, and obstruction of justice for allegedly orchestrating a $170 million investor fraud scheme during the company's 2021 Series C funding round.
The charges stem from what prosecutors describe as a sophisticated deception designed to inflate IRL's user growth metrics while concealing the true cost of customer acquisition. According to the Department of Justice indictment, Shafi allegedly spent millions on incentive advertising to artificially boost app installs leading up to the Series C while simultaneously telling investors that the company spent "very little" on acquiring new users.
The scheme worked – at least temporarily. IRL secured its Series C at a $1 billion valuation, officially joining the unicorn club with backing from heavyweight investors including Peter Thiel's Founders Fund and venture firm Floodgate. The company's pitch was compelling: a platform designed to help users organize real-world events and activities, positioned as an antidote to the digital-only social experiences dominating the market.
But prosecutors allege the financial engineering went far beyond marketing manipulation. The indictment claims Shafi concealed the massive user acquisition expenses by invoicing them to another firm, creating a false picture of the company's unit economics – a critical metric for any social media platform. Even more egregiously, the DOJ alleges that Shafi and his fiancée diverted investor funds for personal use, including "luxury hotel stays, luxury clothing, purchases from home furnishing retailers, thousands of dollars for art classes, and hundreds of thousands of dollars for Shafi's wedding, including payments for wedding guests' airfare and luxury hotels."
The allegations paint a picture of classic Silicon Valley excess funded by investor dollars meant to build a sustainable business. IRL had shown genuine promise in its early days, ranking among Apple's top social apps in 2018. Shafi had positioned the company as a direct competitor to Facebook and Snapchat, capitalizing on growing concerns about social media addiction and the need for more meaningful, offline connections.
