Snapchat’s newest feature, Snap Map, is based on its latest acquisition, social mapping startup Zenly. TechCrunch has learned that Snapchat has bought Zenly for between $250 million and $350 million in mostly cash and some stock in a deal that closed in late May. Snapchat will keep Zenly running independently, similar to how Facebook lets Instagram run independently.
[Update 8/11/2017: Snapchat’s SEC filings confirm that it paid $213.3 million in cash for Zenly, though additional retention packages and milestone-based bonuses could push it above the $250 million threshold.]
Zenly’s app lets users see where their friends currently are on a map using constant GPS in the background. People can then message these friends in the app to make plans to hang out.
The Paris-based startup’s app has 4 million downloads according to Sensor Tower, with 28% from France but also sizeable numbers in Asia including 12% in South Korea and 8% in Japan. The app is mostly used by teens trying to keep up with their friends around town, at school, or at concerts and other events. Zenly had raised $35.1 million, including a $22.5 million Series B in September 2016 led by prestigious Silicon Valley venture capital firm Benchmark.
This morning, Snapchat launched its Snap Map location-sharing and location-based content discovery feature. It works slightly differently, only pulling your location when you open the app, but otherwise looks so similar to Zenly that we suspected Snapchat had copied it. Sources told us Snap expressed acquisition interest, but Zenly initially rejected them.
After more digging, we’ve learned from sources close to the deal that Snapchat did in fact acquire Zenly. A Zenly terms of service change on May 25th may be related to the deal. A Snapchat employee has also been spotted retweeting people congratulating Zenly’s founders.
Rather than shutting down Zenly and folding it into Snapchat, Snap Inc. will allow Zenly to run somewhat autonomously. We asked Snap, but it declined to comment, and Zenly hasn’t returned our inquiries. Instead, here’s TechCrunch’s interview with Zenly CEO Antoine Martin at Disrupt London last year.
With both Snap Map and Zenly, Snap Inc. is hedging its bets in the social content space. Because its Snapchat Stories feature is being aggressively copied by Instagram and Facebook’s other apps, Snapchat is wise to expand into the social utility space of helping people meet up offline. Now Snap could own two different apps on people’s home screens.
Making plans with friends involves a high degree of intent — about what people want to eat or do — there are plenty of advertising and partnership opportunities down the line. You could imagine restaurants, movie studios and more hoping to hit Zenly or Snap Map users with ads as they plan to go out with friends.
While $250 million to $350 million may seem like a lot to pay for Zenly, Snapchat has seen many of its other expensive acquisitions turn out well. It bought Looksery for $150 million in cash and bonuses, which went on to power its iconic augmented reality face filters. It bought Bitstrips for $64.2 million, which has flourished as Snapchat’s Bitmoji personalized avatar stickers. Story Search, QR Snapcodes and its Spectacles glasses were all based off its acquisitions of Vurb, Scan.me and Vergence Labs, respectively.
Zenly doesn’t seem to fit with Snap’s mission to be a camera company. But buying an app for meeting up with friends could let Snapchat own the path to doing the things worth capturing on camera.