Snap Inc., responsible for the creation of the popular social media platform Snapchat, has now acquired an Israeli augmented-reality startup known as Cimagine, for a sum of about $30 to $40 million.
Snap looks to begin new research and developments activities in Israel with Cimagine, which currently hails from Kfar Yehoshua, close to the city of Nazareth.
Cimagine came to life in 2012 by the hand of entrepreneurs Yoni Nevo, Nir Daube, and Ozi Egri. They produce augmented-reality technology for businesses, such as trial 3D models for furniture.
The Middle Eastern effort received a commendation from Inc.com and Microsoft as one of Israel’s most promising startups. Forbes named it one of the Israeli companies to watch in 2016.
A possible future for Snapchat after Instagram
Cimagine’s purchase, some sources point out, might mark Snapchat’s shift towards a different market, such as online shopping through its app. Cimagine already has deals in the United States, UK, and Australia.
Earlier this year, Instagram introduced the ‘Stories‘ feature, which allowed users to post a stream of videos and images that people can look at one after the order. Basically, they imitated (and enhanced) Snapchat’s functioning.
The result was a subsequent plunge for Snapchat, which found itself caught up in an innovation war with an unlikely competitor, someone that had already carved an independent niche in the social media realm.
Snapchat doubled its purchases this year and plans a huge IPO in 2017
Snapchat also bought Canadian company Bitstrips in March for $100 million. The Toronto-based company is famous for its mobile platform, which allows users to create cartoon versions of themselves.
The company later integrated them into the app as ‘bitmojis.’ Their popularity has arguably lowered since then, but Snapchat did manage to raise $1.81 billion in funding two months later, which might have to do with that business tactic.
More than a month ago, the company announced that it was preparing to release its IPO, that is, an Initial Public Offering. They did it confidentially with the news surfacing through unnamed sources close to the matter.
The company is currently aiming to reach a valuation of $20 to $25 billion, which will achieve an official status probably on March of next year, according to initial reports. Morgan Stanley and Goldman Sachs are the companies currently handling the offering.
Snapchat still maintains more than 150 million active users worldwide and had a goal to generate more than $350 million in advertising revenue this year thanks to its purchase of publicity platform Flite a few weeks ago.
Source: Venture Beat