Snap Inc.

Snap Inc.
Formerly called
 Snapchat Inc. (2011-2016)
Private
Industry
Founded September 16, 2011 (2011-09-16)[1]
Founders
Headquarters Venice, Los Angeles, California[2], United States
Area served
 Worldwide
Key people
Products
Subsidiaries
Website snap.com

Snap Inc. is an American multinational technology and social media company, founded on September 16, 2011 by Evan Spiegel and Bobby Murphy and based in Venice, Los Angeles. Its products include Snapchat and Spectacles. It was originally named Snapchat Inc. upon its inception, but it was rebranded on September 24, 2016 as Snap Inc. in order to include the Spectacles product under a single company.

History

The company was founded on September 16, 2011 by Evan Spiegel and Bobby Murphy, simultaneously on the initial relaunch of Picaboo as Snapchat.

On December 31, 2013, the application was hacked and 4.6 million usernames and phone numbers were leaked to the Internet.[4] Also in December, Emily White, who had formally been a high-profile executive with Facebook, Instagram, and Google, was hired as COO. Her tenure with the company ended in March 2015.[5]

By January 2014, the company had refused offers of acquisition, including overtures from Mark Zuckerburg to buy Snapchat and its assets, with Spiegel commenting that "trading that for some short-term gain isn’t very interesting".[6] In May of the same year, the company acquired the software company AddLive and reached an agreement with the Federal Trade Commission (FTC) following the leak, citing misinterpretations on storage of user data and the fact that "snaps" can still be accessed regardless of its expiration.[7][8] In December, the company acquired Vergence Labs for $15 million in cash and stock, who were the developers of Epiphany Eyewear, and mobile app Scan for $150 million, which was revealed during the Sony Pictures Entertainment hack.[9][10]

In May 2015, the company moved from its original headquarters to a 47,000 ft2 (4,366.4429 m2) office complex near Venice Beach and signed a 10-year lease.[11] In September, the company acquired Looksery to develop Lenses for its mobile app, a feature based on Looksery's facial recognition software.[12]

In March, July and August 2016, the company acquired Bitstrips for $100 million, Obvious Engineering, the developers of Seene, for an undisclosed amount and Vurb for $100 million.[13][14][15] On September, the company rebranded to Snap Inc. and unveiled a pair of smartglasses called the Spectacles.[16][17][18] On October, the company planned to initiate an initial public offering (IPO) with a value of $25–35 billion and was filed in November.[19][20]

Products

The company develops and maintains the image messaging and multimedia mobile app Snapchat, as well as develops and manufacturers the wearable camera called Spectacles, a pair of smartglasses that connect to the user's Snapchat account and records videos in a circular video format adjustable in any orientation.

Funding

Snapchat raised $485,000 in its seed round and an undisclosed amount of bridge funding from Lightspeed Ventures.[21] By February 2013, Snapchat confirmed a $13.5 million Series A funding round led by Benchmark Capital, which valued the company at between $60 million and $70 million.[22] In June 2013, Snapchat raised $60 million in a funding round led by venture-capital firm Institutional Venture Partners,[23] and the firm also appointed a new high-profile board member, Michael Lynton of Sony's American division.[24] By mid-July 2013, a media report valued the company at $860 million.[25] On November 14, 2013, The Wall Street Journal reported that Facebook offered to acquire Snapchat for $3 billion, but Spiegel declined the cash offer.[26] Tech writer Om Malik then claimed on November 15, 2013 that Google had offered $4 billion, but Spiegel again declined.[27] On December 11, 2013, Snapchat confirmed $50 million in Series C funding from Coatue Management.[28] Four more funding rounds, from December 2014 to March 2016, amounted to approximately $1.2 billion and totaled funding at $1.36 billion.[29] Beyond 2014, the company had achieved a valuation of $10–$20 billion, depending on the source.[30] According to reports in May 2016, the company's estimated worth was said to be approaching $22 billion in the event of a new round of investment.[31] Further reports in 2016 suggested that funding was almost at $3 billion and that Snapchat was targeting yearly revenues of a billion dollars.[32]

Controversy

Reggie Brown lawsuit

In February 2013, Reggie Brown sued Evan Spiegel and Bobby Murphy. Early investors also were eventually named in the lawsuit. Brown said that he had once been the chief marketing officer for the initial selfie app used to launch Snapchat, claimed that he had come up with the original concept, which he had ultimately called Picaboo, and that he had created the mascot logo for the product while working with Spiegel to promote and market the idea. Originally titled Toyopa Group, LLC, Brown said that he had named the newly formed company as well. Brown's lawyers offered documentation of a collaboration with Spiegel and Murphy, but Snapchat described the lawsuit as meritless and called Brown's tactics a shakedown. During April's depositions, Brown testified that he had believed he was an equal partner, and that he had agreed to share costs and profits. Spiegel instead described Brown as an unpaid intern who had been provided valuable experience, and although Murphy claimed that he had not fully understood what Brown's role was supposed to have been, he too characterized Brown's involvement as having been that of an internship. Months later, Spiegel dismissed the lawsuit as an example of opportunists who seek out rapidly successful companies in an attempt "to also profit from the hard work of others".[33][34][35][36][37][38][39][40]

On September 9, 2014, the company announced that they had settled the lawsuit filed by fellow student and former friend Reggie Brown for an undisclosed amount. As part of the settlement, they credited Brown with the conceptual idea for Snapchat.[41] The press release published by Snapchat's communication department quoted Spiegel:

"We are pleased that we have been able to resolve this matter in a manner that is satisfactory to Mr. Brown and the Company. We acknowledge Reggie's contribution to the creation of Snapchat and appreciate his work in getting the application off the ground." [41]

FTC

The government agency alleged that the company had exaggerated to the public the degree to which mobile app images and photos could actually be made to disappear. Following a settlement in 2014, Snapchat was not fined, but the app service agreed to have its claims and policies monitored by an independent party for a period of 20 years.[42]

References

  1. ↑ "Picaboo: How to send naughty photos without getting caught". Shinyshiny.tv. 16 September 2011. Retrieved 15 November 2016.
  2. ↑ "Snap Inc.". Snap Inc.
  3. ↑ "Snap Inc.: CEO and Executives - Businessweek". Bloomberg L.P. Retrieved 15 November 2016.
  4. ↑ Yueng, Ken (31 December 2013). "Confirmed: Hackers exploit Snapchat's security hole, leak 4.6m usernames and phone numbers online". TheNextWeb. Retrieved 15 November 2016.
  5. ↑ Eadicicco, Lisa (2015-03-13). "Snapchat loses its very experienced COO". 'Business Insider'. Retrieved 2015-03-15.
  6. ↑ Fiegerman, Seth (6 January 2014). "Snapchat CEO Reveals Why He Rejected Facebook's $3 Billion Offer". Mashable. Retrieved 15 November 2016.
  7. ↑ Hamburger, Ellis (2 May 2014). "Snapchat made a secret acquisition to power its new video chat". The Verge. Retrieved 15 November 2016 – via Vox Media.
  8. ↑ "Snapchat Settles FTC Charges That Promises of Disappearing Messages Were False". Federal Trade Commission. 8 May 2014. Retrieved 15 November 2016.
  9. ↑ Yarow, Jay; Shontell, Alyson; Cook, James (16 December 2015). "It Looks Like Snapchat Paid $15 Million To Buy A Google Glass-Like Startup". Business Insider. Retrieved 14 November 2016.
  10. ↑ Constine, Josh (16 December 2014). "Snapchat Plans Music Feature, Acquired QR Scan.me For $50M And Vergence Eyeglass Cam For $15M". TechCrunch. Retrieved 15 November 2016 – via AOL.
  11. ↑ Stone, Madeline (1 May 2015). "Snapchat gobbles up big office complex near Venice Beach with 10-year lease". Business Insider. Retrieved 15 November 2016.
  12. ↑ Shontell, Alyson (15 September 2015). "Snapchat buys Looksery, a 2-year-old startup that lets you Photoshop your face while you video chat". Business Insider. Retrieved 15 November 2016.
  13. ↑ Novet, Jordan (25 July 2016). "Seene shutting down 3D photo app following reported acquisition by Snapchat". VentureBeat. Retrieved 15 November 2016.
  14. ↑ "Exclusive: Snapchat Buys Bitmoji Maker". Fortune. 24 March 2016. Retrieved 15 November 2016 – via Time Inc.
  15. ↑ E. Lessin, Jessica; Dotan, Tom (15 August 2016). "Snapchat to Buy Vurb for More Than $100 Million". The Information. Retrieved 15 November 2016.
  16. ↑ Stevenson, Seth (24 September 2016). "Snapchat Releases First Hardware Product, Spectacles". The Wall Street Journal. Retrieved 15 November 2016.
  17. ↑ Chaykowski, Kathleen (24 September 2016). "Snapchat Leaps Into Hardware, Rebrands As 'Snap Inc.'". Forbes. Retrieved 15 November 2016.
  18. ↑ Newton, Casey (23 September 2016). "Snapchat unveils $130 connected sunglasses and rebrands as Snap, Inc.". The Verge. Retrieved 15 November 2016.
  19. ↑ Statt, Nick (15 November 2016). "Snapchat just filed for its IPO". The Verge. Retrieved 15 November 2016 – via Vox Media.
  20. ↑ Burgess, Matt (17 October 2016). "Snapchat reportedly gearing up for £20 billion IPO". Wired. Retrieved 15 November 2016 – via Condé Nast.
  21. ↑ Gallagher, Billy (October 29, 2012). "You Know What's Cool? A Billion Snapchats: App Sees Over 20 Million Photos Shared Per Day, Releases On Android". TechCrunch. Retrieved December 22, 2012.
  22. ↑ Primack, Dan. (June 26, 2013) Snapchat's liquidity trap – The Term Sheet: Fortune's deals blogTerm Sheet. Finance.fortune.cnn.com. Retrieved on December 9, 2013.
  23. ↑ "Snapchat Snaps Up A$80M Series B Led By IVP at An $800M Valuation".
  24. ↑ McBride, Sarah (June 24, 2013). "Snapchat lands $60 million and new board member Michael Lynton". Reuters.
  25. ↑ Large, Bithia (July 19, 2013). "Snapchat pivots from privacy to publicity". New Statesman. New Statesman. Retrieved July 20, 2013.
  26. ↑ "Snapchat Spurned $3 Billion Acquisition Offer from Facebook". Retrieved November 14, 2013.
  27. ↑ "Snapchat Allegedly Rejected $4B Buyout Offer From Google". Retrieved November 15, 2013.
  28. ↑ "Snapchat Raises $50 Million in Series C From Coatue Management". Retrieved December 11, 2013.
  29. ↑ Snapchat Overview, "Snapchat", Crunchbase.com, March, 2016. Retrieved May 9, 2016.
  30. ↑ Ingrid. As of May 24th, 2016, Snapchat was estimated to be worth $22 billion.Lunden. "Snapchat Has Raised $485 More From 23 Investors, At Valuation Of Up To $20". TechCrunch. AOL. Retrieved May 16, 2015.
  31. ↑ Katie Roof, "Snapchat is raising more money $20 billion", techcrunch, May 24, 2013. Retrieved May 24, 2016.
  32. ↑ Ingrid Lunden Katie Roof, "Snapchat raised $1.8B in a Series F round; leaked deck reveals revenues, user numbers", Techcrunch, May 26, 2016. Retrieved May 26, 2016.
  33. ↑ Karl Taro Greenfield,"The Billion Dollar Battle for Snapchat", Playboy, February 25, 2014. Retrieved March 31, 2016.
  34. ↑ Jim Edwards,"Photos Texts And Emails Show The Alleged Betrayal At The Heart Of Snapchat", Business Insider, August 11, 2013. Retrieved March 27, 2016.
  35. ↑ Billy Gallagher, "The Snapchat Lawsuit, Or How To Lose Your Best Friend Over $70 Million", Techcrunch, March 7, 2013. Retrieved March 27, 2016.
  36. ↑ Alyson Shontell, "These Leaked Videos Could Lead To A Huge Payday For Ousted Snapchat Co-Founder", Business Insider, Nov 6, 2013. Retrieved May 18, 2016.
  37. ↑ Alyson Shontell, "SNAPCHAT LAWSUIT VIDEOS: After A 37-Second Pause, Snapchat's CEO Describes Regrets About The Friend He Ousted", Business Insider, Nov 25, 2013. Retrieved March 3, 2016.
  38. ↑ sfg,"3 Must-Watch Videos Show Why The Guy Suing Snapchat Could Win Millions Of Dollars
  39. ↑ Etan Smallman, "How Metro Was Ushered From Snapchat", metro.co.uk, Nov 28, 2013. Retrieved March 3, 2016.
  40. ↑ https://snap.com/news/page/7
  41. 1 2 Mary Ritti (9 September 2014). "Snapchat and Reggie Brown Resolve Dispute" (Press release). Business Wire. Business Wire. Retrieved 29 October 2014.
  42. ↑ Andrea Peterson , "Snapchat agrees to settle FTC charges that it deceived users", The Washington Post, May 8, 2014. Retrieved August 16, 2016.
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