With Israeli acquisition, is Snapchat betting on augmented reality?

The messaging app has purchased an Israeli augmented reality startup whose technology allows users to test out on their phones how a new purchase would look in their home or office.

First Look

Snapchat has bought an Israeli augmented reality startup, joining a number of big tech companies showing interest in technology that overlays the digital world onto the real one. 

The purchase of Cimagine cost Snaphat an estimated $30-40 million, the Israeli business publication Calcalist first reported Sunday. Cimagine developed True Markerless Augmented Reality, a technology that allows users to see on the screen of their mobile device how furniture or appliances would look in the space of their home or office.

Snapchat already incorporates augmented reality into its app, with filters, for instance, that stream rainbows out of a user’s mouth. Pokémon Go made AR technology famous this summer with the mobile game that superimposes digital monsters on city streets and other public spaces. Retailers including Ikea, Lowe’s, and Wayfair are also looking to feature augmented reality.

Cimagine will become Snapchat’s research and development center in Israel, according to Cataclist. The technology Cimagine developed is used by Coca Cola to show off vending machines and coolers to would-be buyers, as well as online and brick-and-mortar retailers. But Cataclist reports Snapchat bought Cimagine more for its talented staff of 20 than its technology.

The purchase could give a bump to Snapchat’s valuation before it goes public, expected as early as March. The California-based startup is currently valued as much as $25 billion.

Snapchat’s first release of AR-like technology came with its unique filters, dubbed Lenses. The feature uses facial recognitions and geo-location to coat filters over an image taken by a mobile device camera: when a user opens their mouth, for instance, a digital rainbow pours out on the screen. But this technology isn’t true augmented reality, notes Quartz, defining the real deal as when "computers use your location, image recognition, and other data to provide more information on what you're seeing."

Even so, it's made an advertising impact. Users spend an average of 20 seconds per day playing with Lenses, according to Snapchat’s own advertising page. During the Super Bowl, Gatorade’s Snapchat lens had more than 160 million views. A single Cinco de Mayo lens on Snapchat, sponsored by Taco Bell, got 224 million.

Snapchat has also tried to learn from the mistakes of Google Glass to build a pair of augmented reality glasses. The Snapchat Spectacles, at $129.99 a pair, capture short video from a first-person perspective. Users can then post the 10-second clips on the app using a wireless connection between the glasses and their smartphone.

Like Snapchat’s Lenses filters, the Spectacles are introducing an emerging technology in an easy-to-use format, as Recode describes them, calling the product “a funny, laid-back play on designer sunglasses. They’re cheap enough to be an impulse purchase for many, or a reasonable gift.”

Major tech firms including Google, Facebook, Apple, and Microsoft are reportedly researching augmented reality, and retailers have started to incorporate the technology into their buying experience. Ikea appears to be the first major retailer to offer customers a preview of how, say, a sofa looks in their living room.  The home outfitter was an early adopter of virtual reality, offering customers immersive visualizations of rooms they can digitally customize with different colors and styles, as The San Diego Tribune reported. Lowe’s and Wayfair are also looking at Google Tango, an app that uses advanced location-sensing, according to MIT Technology Review, which will allow a customer to see how a product fits into the space available.