Snap Gets Startup WaveOptics for $500 Million and Adds New Features to Facilitate Higher Engagement

By Adriaan Brits Friday, May 21, 2021

Snap, the company behind the popular social media app Snapchat, is reportedly acquiring augmented reality (AR) startup WaveOptics for more than $500 million. Moreover, the social media business has announced a series of new products and features as the company works to increase user engagement on its app.

Closeup of Snapchat app on a smartphone.

Busy Few Days for Snap

The WaveOptics acquisition doesn’t come as a surprise as Snap has cooperated with the startup company in the past. This business deal marks the biggest ever acquisition for the social media company as it ramps up its business investments in the AR sector.

The startup company is known for producing waveguides, which are thin pieces of glass or plastic inside AR glasses that allow for the overlapping of virtual objects that a user is meant to see. WaveOptics’s products are incorporated in Snap’s new Spectacles, presented Thursday. Interestingly, the new Spectacles are not for sale, the social media company said.

“Snap has offered new Spectacles to a select group of global creators to realize their visions overlaid on the world and push the boundaries of augmented reality. Through Spectacles and Lens Studio, these creators have already brought their imaginations to life,” the company said in a press release.

WaveOptics is a British startup company founded in 2014, which has so far raised $65 million in business funding. Snap will reportedly pay half of the agreed amount in shares now, while the other half will be paid in two years either in cash or in shares.

“Dual 3D waveguide displays and a 26.3 degree diagonal field of view overlay immersive AR Lenses on the world, before your eyes,” Snap added, referring to WaveOptics’s product that is incorporated into Spectacles.

The social media business plans to incorporate the startup into its hardware division, which is headed by Steen Strand. WaveOptics will still be allowed to sell its business products to other companies, while it will continue to help Snap make progress in the AR sector.

Moreover, the social media company presented new AR tools and features to help social media creators. Snap has unveiled a “Scan” button that connects Snapchatters to Lenses in an easy way. Furthermore, a “Lens Studio” app is presented to allow creators and developers to build, publish, and promote Lenses.

Snap has also partnered with the online luxury fashion business Farfetch to allow its users to now decide what items they’re looking to browse and try on in AR. Similar business partnerships have also been announced with The Estée Lauder Companies and MAC Cosmetics.

These new tools and features come at the right time for the company as the number of monthly active users (MAUs) has now surpassed 500 million.

“We are encouraged at data showing solid user adoption across the Snap platform, while today’s announcements have further laid the groundwork for improving monetization,” Bank of America analyst Justin Post said in a memo.

Summary

Snap is buying the British AR startup company Waveoptics for more than $500 million in shares and cash. Moreover, the company presented a new model of its Spectacles, glasses that bring AR to life. Additionally, the business has added new products and tools designed to drive engagement and user interaction.

About the Author


Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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