As much of the world was welcoming Santa Claus down their chimneys, news emerged this week that Snap, the company behind perennially popular social network Snapchat, had acquired augmented reality (AR) startup Cimagine Media for “up to” $40 million.
Founded in 2012, Cimagine works on computer vision and real-time image-processing technologies, which is entirely in line with Snap’s mission to be a “camera company” that pushes far beyond its ephemeral photo-sharing roots into myriad other areas, including augmented reality and physical cameras.
Indeed, Snapchat (the company) rebranded as Snap in September and launched its first piece of hardware — a pair of $130 connected glasses, called Spectacles.
But perhaps more notable this year was the bumper funding round that has enabled the Venice, California-based startup to lay the foundation for its anticipated initial public offering (IPO) sometime next year.
In May, Snap raised a whopping $1.8 billion, which sent the company’s total funding since its inception in 2011 flying past the $2.5 billion mark. Ahead of that Series F round, Snap bought Bitstrips, a Canadian company that makes personalized emojis known as bitmojis, and a few months later Snapchat introduced bitmojis into its own service.
But the gargantuan $1.8 billion war chest evidently made it possible for Snap to double down on its efforts to bolster its technological prowess — in 2016, the company made five known acquisitions, more than double the tally for its entire history.
In June, news emerged that Snap had bought Obvious Engineering, a company working on “new ways to accurately capture, share and re-experience life in 3D and VR.” The company also operated Seene, an app that let users create and share 3D images, though it was subsequently shuttered.
A couple of months later, Snap snapped up mobile discovery app Vurb in a deal thought to be worth around $110 million. It’s not entirely clear what Snap has in mind for Vurb, but it could be something along the lines of becoming a platform similar to Facebook, in terms of letting third-party apps use its messaging smarts to increase event discoverability. Ultimately, it seems clear the deal was all about helping make Snapchat stickier for its users.
Advertising will play a pivotal role in Snap’s efforts to entice companies on board and boost its revenues, which is why it reportedly acqui-hired San Francisco-based ad-tech startup Flite last week. Flite’s self-stated mission is to “help the world’s leading brands build beautiful, intelligent ads,” which include 360-degree videos, “shoppable” videos, and ads built for mobile-first platforms — such as Snapchat.
Building for the future
In 2016, we’ve been given a good glimpse of Snap’s aspirations, through its acquisitions and product launches across AR, VR, 3D, cameras, content, and advertising. To what extent these acquisitions complement products that Snap is already working on isn’t entirely clear, because the company is fairly adept at keeping its cards close to its chest. Snap reportedly filed its IPO plans confidentially, something that companies are allowed to do if their revenue is less than $1 billion.
But company cofounder and CEO Evan Spiegel has previously said that 70 percent of the company’s engineers are working on new products, and these acquisitions give Snap significantly more depth in terms of engineering talent — talent it will need if it’s to build a serious business and make a success of its IPO.
Snap reportedly now has more than 150 million daily active users, which is more than Twitter. And following Facebook’s failure to acquire Snapchat in a $3 billion offer back in 2013, Mark Zuckerberg and his team have taken to copying Snapchat’s features as a matter of course. If nothing else, that should be taken as a sign that Snapchat is doing something right.