Snapchat debuted with this idea of geofilters last year, which enabled anyone to create custom filters for a specific place for a set time. However, Israeli startup Mobli, had patented the idea of geofilters back in 2012 which was approved about two years later.
It has been revealed, Moshe Hogeg, the serial entrepreneur and CEO of Mobli, has sold the patent to Snapchat for a record $7.7 million. The deal was reportedly signed earlier this month and will let Snap avoid its involvement in any possible legal disputes.
This is the highest paid amount for a patent in the Israeli tech industry till date. The patent (US#20160373805, US#9459778) was christened Methods and Systems of providing visual content editing functions. It included server-side filters, i.e. it came from the server and not with the app, which means app need not be updated to add every new Geo-filter to the app.
Mobli, launched six years ago, was touted to be one of Instagram’s major rival. Having raised $86 million in funding, it shut down mid-last year after its product, Galaxia, failed to make its mark. The company had, in total, worked on four different apps which did not work out.
In a recent S-1 filing, Snapchat mentions that sponsored geofilters contribute significantly to its revenues. It mentions the sponsored campaigns for various brands including Starbucks, that used the geofilters have created “value” for the advertiser.
Snapchat majorly monetizes its business by displaying in the application advertisements that they sell and advertisements sold by their partners. Snapchat has its priorities sorted: it aims to invest in product innovation and take chances to further improve the camera platform. This will allow it to drive user engagement, which can be monetized through advertising. The revenue generated can then be used to sponsor future product innovation to grow the business.
Snapchat has been continuously experimenting with its features and filters, the latest being the 3D filters. It places 3D objects around you as use the rear-facing camera to view the surroundings.