I never used it but my understanding is that it was an anonymous outlet where people in the area could post and get fed into the same channel. You could say whatever you wanted without worrying it getting traced back to you, and nearby people would see it.
For obvious reasons, that was popular at colleges. Also for obvious reasons, this kind of thing is really hard to monetize. Take almost $100M in VC and this does not make for a winning combination.
Online anonymity can be freeing, but as any half-awake internet user knows, it comes with a massive mound of worms for both readers and moderators alike.
Big name investors apparently didn't realize this when they wrote the checks, so YikYak panicked and nixed its value proposition to keep investors happy and bad press diverted. It sounds like everyone stopped using it immediately, which seems only natural, as they killed its entire reason to exist.