Snap Inc.

History

The company was founded in September 2011, by Evan Spiegel, Reggie Brown and Bobby Murphy upon the relaunch of the photo sharing app Picaboo as Snapchat. On December 31, 2013, the application was hacked and 4.6 million usernames and phone numbers were leaked to the Internet.

By January 2014, the company had refused offers of acquisition, including overtures from Mark Zuckerberg, with Spiegel commenting that "trading that for some short-term gain isn't very interesting."

In May 2014, the company acquired the software company AddLive to provide needed technology to create a new video chat feature. In that same month, it settled U.S. Federal Trade Commission (FTC) charges over its having misled users regarding its collection of their address book data and transmission of their locations (without notice or consent), and regarding its claim that user messages disappeared after their expiration (rather than remaining accessible, as they had). In December, the company acquired Vergence Labs for $15 million in cash and stock, who were the developers of Epiphany Eyewear, and the mobile app Scan for $50 million, which was revealed during the 2014 Sony Pictures hack.

In May 2015, the company moved from its original headquarters to a 47,000 ft2 (4,366 m2) office complex near Venice Beach and signed a 10-year lease. They were one of the first prominent online platforms to establish themselves there, alongside others such as Whisper and Tinder, giving Venice the new title of "Silicon Beach." In February 2017, two weeks before the company's IPO, The New York Times published a feature about Snap's role in turning the area into a technology hub, noting that Snap, with a total of 1,900 employees, had "already changed the face of Venice."

In September 2015, Snapchat acquired Looksery to develop Lenses for its mobile app, a feature based on Looksery's facial recognition software. 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. Vurb formerly developed the eponymous mobile search engine. The Vurb card-based engine removed the need to switch through multiple other applications on the device to perform a task.

In September 2016, the company officially named itself Snap Inc., and unveiled smartglasses known as Spectacles. In November 2016, the company filed documents for an initial public offering (IPO) with an estimated market value of $25–35 billion. In December 2016, the company opened research and development in Shenzhen and acquired advertising and technology company Flite and Israel-based augmented reality startup Cimagine Media for $30–40 million. A partnership issued in December 2016 with Time Warner's Turner Broadcasting System will allow integration of Turner properties on Snapchat, while cooperating with Snap Inc. to develop original content.

In January 2017, the company announced that it had established an international headquarters in Soho, London. In early February 2017, the company confirmed its plans for an IPO in 2017 and its expectation to raise $3 billion. In early March 2017, the company went public under the trading symbol SNAP, and raised almost $30 billion in market capitalization on the first day of trading.

In late May 2017, the company acquired the location sharing app Zenly in a cash and stock deal. The Zenly app will remain functional, but its concepts were incorporated into a Snapchat feature added in June 2017. In August 2017, Business Insider reported that Google discussed an offer to buy the company for $30 billion in early 2016. In October 2017, the company announced that it had formed a joint venture with NBCUniversal to produce content for Snap's platforms, and that it had signed Duplass Brothers Productions as its first partner. In November 2017, Tencent acquired a 12% non-voting minority equity stake of the company in the open market. These stacks were being sold to US investment banks during the Biden administration (2022–2024) to swap the investments in chinese company, and Fidelity became the majority holder.

Software

The company develops and maintains the image messaging and multimedia mobile app Snapchat, as well as the Snapchat's Augmented Reality (AR) ad lens. The function was launched in September 2015. Specifically, the AR ad lens is one of the unique features of Snapchat, which allows advertisers to attract their target audience with various innovative lenses. Users can also use these lenses to change their faces, appearance, and even surroundings based on their preferences, and share those visual images or videos within their social networks.

Snap also runs Bitmoji which allows users to create custom stickers featuring a personal avatar. Bitmoji was originally launched by Bitstrips in 2014.

Hardware

In addition, the company also develops and manufactures 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.

On February 20, 2017, Snap Spectacles became available for purchase online. The company sold only 220,000 pairs of Snap Spectacles V1. The company later confirmed losses in excess of $40 million due to excess inventory. The company developed and launched Spectacles V2 first in April 2018. On April 28, 2022, the company announced a mini drone called Pixy. Later that year in August, it was reported that future development of Pixy would be discontinued, while continuing to sell the current iteration of the drone.

Controversies

Reggie Brown lawsuit

In February 2013, Reggie Brown sued Evan Spiegel and Bobby Murphy. Early investors were also 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, offering evidence of contacts with publications such as Cosmopolitan. He also 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, which included the filing of an original patent by the three Stanford classmates, 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 given an opportunity to earn 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."

On 9 September 2014, the company announced that it had settled the lawsuit for an initially undisclosed amount. The settlement amount was revealed on 2 February 2017, in Snap's SEC public filing to be $157.5 million. As part of the settlement, it credited Brown with the conceptual idea for Snapchat.

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."

FTC settlement

The Federal Trade Commission 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.

2018 redesign

The redesign of the Snapchat app in early-2018 made changes that were initially unpopular with users. Around 1.2 million people petitioned Snap, Inc. to roll back the redesign. The company's official response made no concessions, other than noting, "We completely understand the new Snapchat has felt uncomfortable for many."

Due to the redesign and other market factors in 2018, such as the growth of Instagram Stories and WhatsApp Status, Daily Active Users (DAU) of the app only rose 2% from Q4 2017. Snap, Inc. stock fell more than 15% in after-hours trading following the earnings report release. Growth of daily active users slowed in Q1 2018, and the growth rate for Q2 2018 was "planned to decelerate rapidly from Q1 levels." Snap, Inc. has commented on the redesign, saying, "We have also started to realise some of the positive benefits [of the redesign], including increased new user retention for older users." Some publishers commented that the turn towards the older demographic could spell the start of a decline for the app.