BeReal SAS, a once-obscure French social media app, has become a key player in the social media zeitgeist.

The free photo-sharing app sends a daily notification to users encouraging them to share still photos captured within a two-minute time limit using a smartphone user's front-and-rear-facing camera simultaneously. BeReal's throwback model is aimed at Gen Z users who are disillusioned by the perfectionist, algorithm-driven feedback loops of competitors such as Meta Platforms Inc.'s Instagram and Beijing Byte Dance Telecommunications Co. Ltd.'s TikTok, analysts said.

"Every generation has different sets of values," said Eric Dahan, CEO and co-founder of Open Influence, a global marketing company that works with content creators. "When you look at Gen Z there's there is huge value placed on authenticity. I think part of that is it's a generation that's been so saturated with overproduced content."

Analysts have mixed views on BeReal's business strategy, though most agreed that the platform would need to find ways to increase engagement and time spent on the app to effectively monetize BeReal's estimated 15 million daily active users. They also note BeReal has more growth potential compared to its larger and more mature competitors, some of which are attempting to duplicate BeReal's defining features.

BeReal did not respond to a request for comment.

By the numbers

U.S. downloads of BeReal on Apple Inc.'s and Google LLC's app stores outstripped the number of comparable Twitter Inc. downloads in June, July and August this year, according to estimates from Apptopia, an app analytics provider. BeReal also drew higher U.S. downloads than Snap Inc.'s Snapchat in August.

While BeReal has not released any of its user metrics, Apptopia estimated that the social media app reached 5.7 million U.S. downloads in August, ahead of Snapchat's estimated 4.8 million that month. Meanwhile, U.S. downloads for TikTok and Instagram reached an estimated 9.1 million and 6.2 million, respectively, according to Apptopia.

Meta does not break out user figures for Instagram specifically in its quarterly disclosures, but Meta's family of apps — which includes Facebook, Instagram, WhatsApp, Messenger and other services — logged 2.88 billion daily active users globally in June. That included about 1.97 billion daily active users for Facebook itself.

TikTok does not report user figures. Snap's Snapchat recorded 347 million daily active users worldwide in its second-quarter earnings report. The company did not disclose U.S.-specific user totals.

Monetization efforts

"The best way for [BeReal] to monetize would be through ad placements and marketing challenges and competitions," said Ashleigh Millar, production manager at U.K.-based MIDia Research. "It will have to stick to its unique selling point of authenticity and being a friends-first app when monetizing, so keeping ads to the discovery page and not interrupting the flow of the Friends page is very important."

BeReal is exploring using in-app purchases to monetize the platform, the Financial Times reported Sept. 17. While some insiders at the app believe paid advertising would be disruptive, the option has not been entirely ruled out, the report said.

The integration of ad revenue is crucial, if not inevitable, said Zach Ciampa, customer experience analyst at 451 Research.

"Assuming the platform has longevity, at some point they're going to introduce ads," Ciampa said. "As long as it's not intrusive — maybe it will be like your Instagram feed, where you see an ad after every couple of posts."

Implementing in-app purchases or a subscription model may prove more challenging as the value proposition for BeReal users needs to be "really great" for that revenue stream to come to fruition, Ciampa noted.

Key competition

In the meantime, BeReal's competitors are duplicating some of the app's design.

Earlier this month, TikTok unveiled TikTok Now, a new feature that sends users a daily prompt to capture a 10-second video or a photo using both the front and back camera. A "TikTok Now" button appears on the app's home screen, replacing an older feature.

TikTok Now launched this month, emphasizing front- and back-facing photos. Source: TikTok

"The new TikTok Now could encourage and cultivate more of a friendly, social media environment alongside a social entertainment environment," MIDia's Millar said. "Or, users will feel that TikTok is stretching too far out with this particular move, and they will continue to use BeReal to scratch their intimate-social-connection itch, while leaving TikTok to satisfy their desire for online entertainment and community."

In August, Snapchat rolled out a dual camera setting that enables users to choose from four layouts, including vertical, horizontal, picture in picture, and cutout. Instagram is also working on a BeReal-like feature, though it is an internal prototype, a Meta spokesperson wrote in an email to S&P Global Market Intelligence.

The copycat cycle of feature adoption among social media companies has been a persistent trend for the last decade, noted Open Influence's Dahan.

"Social media platforms are really getting to feature parity with one another," Dahan said.

As BeReal's features become more popular, it is possible a larger competitor could try to acquire it.

In June, BeReal raised $30 million in series A funding, led by venture capital firms Andreessen Horowitz, Accel Partners and DST Global. BeReal's valuation is approximately $600 million.

"Growth equity social media [companies] tend to have higher valuation multiples and valuation bubbles around them," said Third Bridge senior associate and TMT analyst Sandeep Sharma. "The next year or so will start giving us a clearer picture on how [M&A activity] might take place. Like with a lot of other startups, it's still very much at the early stages of the waiting game."

451 Research is part of S&P Global Market Intelligence.