Snapchat Buys Bitmoji App for More Than $100 Million
Messaging startup Snapchat Inc. has agreed to pay more than $100 million in cash and stock to acquire Bitstrips Inc., the maker of popular virtual-sticker application Bitmoji, according to two people familiar with the deal.
The Bitmoji app lets users create customized cartoon avatars that look like them, and then send them using a special smartphone keyboard. The app, initially launched in October 2014, has surged in popularity, never falling out of the coveted rankings of the top 100 apps in Apple Inc.’s app store at any point this year, according to App Annie. Several celebrities such as actors Seth Rogen and Lena Dunham use the app.
Snapchat, which rarely makes acquisitions, may be stepping up its deal making to compete with Facebook Inc., a growing rival in the fun and funky world of filters and add-ons for mobile messaging. Facebook earlier this month acquired Masquerade Technologies Inc., the maker of an app that lets users enhance videos through filters and the ability to “swap” faces with others in the picture.
The Bitstrips acquisition could help Snapchat build on the quirky library of visual filters and lenses it already offers to the messaging app’s 100 million daily users. The company experimented with selling some of its visual photo effects through a “lens store” but decided to shut down the store in January and offer a rotation of lenses for free.
Fortune earlier reported on Snapchat’s agreement to acquire Bitstrips.
Toronto-based Bitstrips was founded in 2007 by Canadian animator Jacob Blackstock, the company’s CEO, to originally help people create personalized digital comics. Bitstrips had raised $11 million from investors including Kleiner Perkins Caufield & Byers and Hong Kong tycoon Li Ka-shing’s venture-capital fund, Horizons Ventures Ltd.
Snapchat has previously acquired eyeglass maker Vergence Labs for as much as $15 million; video-chat service AddLive for $30 million; and QR-scanning app Scan for as much as $50 million, according to emails reviewed by The Wall Street Journal and sent to and from Michael Lynton, a Sony Corp. executive and Snapchat director. Those emails were released by hackers who infiltrated the movie studio’s computers.
Snapchat recently raised $175 million in fresh funding from Fidelity Investments, valuing the messaging company at $16 billion, the same valuation it received from investors a year ago, a person familiar with the matter told The Wall Street Journal earlier this month.