Voodoo x BeReal
Source: Voodoo

Last week, French mobile publisher Voodoo announced its acquisition of the social networking app BeReal in a deal valued at up to $500M. According to Sifted, one-third of the acquisition value ($166M) will be paid in cash, while the remaining $334M is tied to future performance metrics. For context, Voodoo’s last reported valuation was €1.7B in 2021, so this is a sizable deal that showcases Voodoo’s evolved thinking.

BeReal is a unique blend of photo sharing and social networking: Every day, users take a picture using both the front and back cameras of their phone and share it with their friends. Despite achieving 125M lifetime downloads, BeReal has not yet introduced any monetization strategies and has been fully dependent on venture capital financing. In its latest valuation round in 2022, BeReal was valued at roughly $600M; the company has raised $90M total to date.

As there is no revenue, the valuation is based on BeReal’s audience. According to Voodoo, BeReal has 40M active users, though it's not specified whether this figure refers to monthly active users (MAUs) or another metric. For the sake of this analysis, we will assume it represents MAUs. Data.ai shows that the bulk of the users are on iOS and in so-called tier 1 markets: United States and Western Europe.

Let's make a few assumptions to estimate the cost per daily active user (DAU). If 75% of these users log in daily, that translates to 30M DAUs. Using the rumored cash price of $166M for the acquisition, Voodoo is effectively paying $5.54 per DAU. If you factor in the full price tag, with the earnouts included, we arrive at $16.66 per DAU. Even though this might sound cheap compared to valuations of incumbent social networks such as Facebook, X, or even Reddit, it’s worth noting that BeReal does not monetize at all currently.

This is not just an opportunistic user grab though: Voodoo has strategic interest in consumer apps. While Voodoo is best known for its hypercasual and casual games, it has also ventured into consumer apps with teenage dating app Wizz, pregnancy tracker WeMoms, and shopping app Jamble.

Wizz, Voodoo’s most successful consumer app, was first released in 2019. It is similar to Tinder but is designed for users aged 13 and over. Despite having fewer users than BeReal, Wizz is an established business, boasting 22M lifetime downloads and $40M in net in-app purchase revenue. Over the past 12 months, Wizz has maintained a steady revenue stream, bringing in $25M in net in-app revenue.

What’s in the BeReal deal for Voodoo though? Let’s look at it in terms of short-, medium-, and long-term horizons.

In the short term, Voodoo wants to grow and monetize BeReal. Aymeric Roffé, the CEO of Wizz, will take over as the CEO of BeReal, and this leadership change indicates Voodoo believes it can run BeReal more effectively than its current management. Given that BeReal’s user base is larger than Wizz’s and considering the distinct nature of the two products, it is unlikely that Voodoo will merge its social apps.

However, BeReal is expected to adopt the fast iterative product development approach that has proven successful for Wizz. Voodoo is gaining a sticky, 40M strong user base. For comparison, services such as Reddit and Discord are currently monetizing at low single-digit dollars per DAU on a yearly basis, while Meta is making 10 times that. It’s easy to grow from zero, but considering the minimalism — and assumedly low daily engagement time — of BeReal, achieving even the Reddit benchmark will not be a walk in the park.

In the mid-term, Voodoo wants to leverage the data and user profiles it has across its utility and game apps. In a post-IDFA world, owning large audiences is increasingly valuable. Voodoo’s roots in hypercasual gaming have equipped it with a robust advertising machine. Beyond simply running ads, achieving sufficient scale would enable Voodoo to offer advanced targeting and measurement capabilities, both of which have become more precious since the IDFA deprecation. Cross-promoting targeted users between Voodoo’s own apps is an obvious starting point. The ultimate goal is likely to create a comprehensive ad network capable of competing with industry giants such as Meta and AppLovin.

In the long term, Voodoo might be gearing up for an IPO. Unlike hypercasual and hybridcasual games, which often lack long-term value, successful social apps are known for their high retention rates and ad targeting capabilities when at scale. This is also reflected in the multiples that publicly listed companies trade at. Positioning itself as a company that manages a portfolio of apps, with a strong emphasis on enduring social networks backed by a powerful ad network, will likely result in a significantly higher IPO valuation compared to being seen as a pure game publisher.

This is a huge bet for Voodoo, and its fortunes are now dependent on the success of its social network pivot. Big bets need to pay off, and the next two years will show whether this one will.

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