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Report: Snap Inc. spent millions to get better at augmented reality

Oh, and it could help Snapchat make loads more money.
Chris Velazco, @chrisvelazco
December 25, 2016
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Image credit: Cimagine

The creators of Snapchat are running toward an IPO at full speed, but it seems to have nabbed itself a neat holiday gift along the way. According to a report from The Calcalist (as interpreted by The Times of Israel), Snap Inc. recently acquired an Israeli augmented reality firm called Cimagine for somewhere between $30 million and $40 million. The team will supposedly stay put and become Snapchat's latest R&D division, which no doubt made their holiday plans just a little more festive.

"Fine," we can almost hear you muttering. "But why does this matter?" Well, we can hazard a few guesses, but everything boils down to one simple fact: this purchase could help Snap Inc. make some serious cash. If you haven't heard of Cimagine before, it spent the last few years building some surprisingly neat augmented reality tech — specifically, software that lets brands and retailers show off their products in the virtual space in front of your smartphone's camera. We've seen companies like Google do this with Tango, but that specific implementation requires extra cameras and sensors — Cimagine's doesn't. (That's not exactly rare, by the way, but the lack of extra hardware makes the people who achieve solid performance through just software look really good.)

That said, do us a favor: Imagine a Snapchat filter that, in addition to giving you a goofy pair of glasses and a trimmer face, also plops a virtual Coke vending machine behind you. Snap Inc. also rolled out "world lenses" last month, which allows people to use their phones' main/rear cameras to see objects — like stars, moons, and clouds that drool rainbows — hovering in front of them. Cimagine's tech and team could help the company figure out how to turn these rudimentary effects into mini-experiences fit into AR environments with more sophistication. This time, imagine a filter where you tap on a stretch of empty space of wall and a Coca-Cola Santa Claus emerges from it waving a frosty bottle.

These are pretty ham-fisted examples, but Cimagine already has a working relationship on the books with those sugar-water slingers, and brands likes Taco Bell haven't shied away from the from big price tags that come with of sponsored filters. No, seriously: sources told Business Insider earlier this year that the 24-hour filters can run between $100,000 and $750,000. The thing is, Snapchat has to work more closely with these brands, especially because a good sponsored filter takes a ton of work to achieve. With a new codebase to work with, 20 brainy new employees in Israel and more newcomers to follow, this buyout could see Snap Inc. ho-ho-hoing all the way to the bank.

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