Snap Inc.

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