If you follow the references, the story seems a little bit saner than CNBC makes it sound: Or Arbel didn't raise 1MM from institutional VCs, but rather (FT reports, without any details on the terms or confirmatory details) from his former boss at a company called Mobli, who apparently has an "angel fund". That boss, Moshe Hogeg, had in the same time frame commissioned an app from Arbel.

So, contra the impression you'd get from second- and third- hand reports of this story, some unknown guy did not spend 8 hours coding an app that just says "Yo", tour it to venture capitalists, and pick up 1MM.