Social media unicorn Snapchat, recently rebranded Snap Inc., has acquired Cimagine Media, an augmented reality startup, in order to bolster its position in the emerging market.

The deal, estimated to be worth $30 million to $40 million, marks the video messaging app’s first Israeli acquisition, reports Reuters. (See also: Snap Inc. (Snapchat).)

Snap’s New R&D Center in Israel

Cimagine has developed a new technology called True Marketless Augmented Reality, which allows users to virtually place furniture and other things they may purchase in the space of their home, on their mobile devices. Interestingly, Snapchat likely targeted the firm due to its highly skilled team, rather than this technology. Los Angeles-based Snapchat will use Cimagine as its research and development center in Israel, expected to rapidly expand its workforce from its current level of about 20 employees.

The Cimagine team will help Snapchat develop its AR/VR initiatives as it transforms out of being a simply picture sharing app to a platform that debuts the most cutting-edge technology for the average mobile user.

A Unicorn Worth Up to $25B

The messaging platform Snapchat has reportedly filed for an initial public offering (IPO) in a deal that could be worth as much as $25 billion, set to debut as soon as March. In 2013, Facebook Inc. (FB) attempted to acquire the firm for $3 billion.

Snapchat, which famously exceeded Twitter in daily users, marked at 60 million as of September, has succeeded in winning over younger users. Now the unicorn looks to return value back to shareholders.

After a weak tech IPO market in 2016, and a weak IPO market overall, resulting in a surge of late-stage capital funding and uncertainty caused by the U.S. presidential election, 2017 is forecast to bring back a boom in tech startups going public. Business optimism is at an all-time highs, positioning Snapchat’s IPO for success.

In anticipation of its IPO, Snap Inc. has spent hundreds of millions buying various smaller companies such as adtech startup Flite, mobile search platform Vurb, computer-vision company Seene and bitmoji startup Bitstrips, among others. 

 

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.