C-Imagine The Possibilities
In its first venture into Israel, the company behind the wildly popular Snapchat app, Snap Inc., has agreed to buy the Israeli augmented reality company Cimagine Media for what sources estimated was $40 million. This acquisition will provide Snap with a development center in the Middle East, one that will house Cimagine Media’s 20 current employees.
Snapchat went public when it filed for an initial public offering (IPO) this March that valued the company between $20 billion and $25 billion. This was the largest IPO since Chinese e-commerce company Alibaba’s IPO in 2014. According to Snapchat, 158 million people use the service each day and create 2.5 billion “snaps” between them. The average user is between 18-24 years old and spends about 30 minutes a day on the service. Growth has slowed recently to “just” 48% year-over-year, and while revenues have grown from $58.7m in 2015 to $404.5m in 2016, losses also mounted to $514m in 2016 from almost $373m a year earlier. Snap employs about 1,500 people across the world. Each office—located in places including China, Seattle, San Francisco, Toronto, and New York City—tends to be anchored around a unique project. There is no question about Snap Inc.’s power and potential, and Cimagine Media couldn’t have been acquired by a better company.
Founded four years ago, Cimagine specializes in computer vision, real-time image processing, mobile development, and international marketing. Cimagine provides retailers and brands with an intuitive experience using their true markerless augmented reality (AR) platform. Cimagine has developed software that uses the camera in smartphones or other devices to recognize objects in a room and add virtual objects to the scene on the screen. That lets users, say prospective furniture buyers, visualize what couches might look like in their living room with a few taps on a smartphone app. Cimagine already has partnerships with Shop Direct, John Lewis, and Coca-Cola, and it’s aiming to help more retailers tap into the potential of augmented reality. Cimagine charges such businesses a monthly fee. Cimagine has already launched the world’s largest implementation of AR in retail to date with Shop Direct, the largest global brand AR deployment with TCCC and the world’s first augmented showroom. Chosen by Microsoft, Coca-Cola, and Inc.com as one of Israel’s most promising startups, and by Forbes as one of the Israeli companies you should watch for in 2017, there is much potential waiting to be uncovered.
How does Cimagine work? Cimagine brings Augmented Reality to commerce and to enterprise through a markerless solution that is launched at the click of a button. Unlike other solutions, Cimagine’s augmented reality engine does not require the user to print and place a reference marker in order to identify surfaces and estimate scale. By combining information from a mobile device’s internal sensors with deep image processing and applying unique computer vision algorithms, Cimagine embeds 3D objects realistically into live video scenes, anchoring them to their position. Virtual products do not drift while the user moves around a room, thereby allowing users to view items from all angles and distances to make informed buying decisions. Cimagine’s proprietary rendering engine supports a high poly-count of 3D assets with textures that are ten times higher than the industry standard. This allows customers to experience life-like 3D product representations that are rendered in real-time at 30 frames per second, the industry’s highest live video rate. Products appear life-like and to scale, so customers can simply and easily see if items fit their homes and offices from different angles and perspectives. Cimagine is cloud-based and their service is delivered as a SaaS solution. Their cloud servers store all product, customer content, and business data to ensure that users have a seamless experience that augments every retailer and brand’s digital catalog. The viewer can be integrated into e-commerce, m-commerce sites, and apps within hours. One embedded line of code can add a customizable ‘visualization’ button to any product page. In-store, a simple scan of the product links it to a digital catalogue which then allows customers to experience it in their homes and share it on social media.
Cimagine, based in Kfar Yehoshua, was founded in 2012 by veteran technologists and product managers from telecommunications companies. The three co-founders are CEO Yoni Nevo, vice president for product development Nir Daube, and Ozi Egri, the vice president for R&D; all of them are entrepreneurs and engineers with a background in computerized vision. Nevo was an intelligence officer in the army for five years before attending Tel-Aviv University, where he received a BA in Computer Science and Management, followed by an MBA in Marketing and Finance. He worked for nine years at ECI Telecom, serving in a few roles while working his way up to Head of Solutions Business Development. Daube went to Ben Gurion University of the Negev, where he earned a degree in Electrical & Computer Engineering. He worked for Telco Systems for almost eight years, with his last position being VP of Product Management. Egri has over ten years of experience in image processing algorithms, and system and R&D management at Rafael and BATM. Since then, the startup has raised about $3 million from the technology incubator Explore, where it operated its first two years. It won financing from Plus Ventures, a venture capital arms affiliated with Explore, from 2B Angels, and the crowdfunding platform OurCrowd.
The Cimagine solution is built for retailers, brands, and manufacturers that want to provide their customers with a differentiated shopping experience and to increase sales. Their technology is built to help address big challenges, such as increasing conversion rates, personalizing shopping experiences, attracting and retaining customers, and reducing the rate of product and equipment returns. Thousands of products are already augmented using Cimagine’s solution with a growing base of leading UK, US, and Australian brands and retailers. Most recently, interactive multichannel retailer HSN partnered with Cimagine to launch an augmented reality design app across two of its home and lifestyle brands within the Company’s Cornerstone portfolio: Frontgate and Ballard Designs.
Cimagine’s solutions can be broken down into three pieces, an augmented sales tool, an augmented retail experience, and augmented showrooms. Their augmented sales tool is a visualization platform that will ultimately improve sales efficiency. It adds another element to a sales pitch by allowing customers to visualize the products in their spaces. Cimagine hopes it will increase sales and avoid repeated customer visits. Coca-Cola frequently sends teams to customer premises to sell vending machine, fridges, stands and signs, verbally and sometimes with the aid of photographs. However, this form of sales requires repeat visits, lengthy pitches and wordy descriptions. Cimagine started their collaboration with Coca-Cola when Cimagine joined The Bridge by Coca-Cola, a commercialization program for innovative start-ups. Coca-Cola made the decision to augment its traditional sales using Cimagine’s unique visualization platform, and since then, has reported a massive 20% increase in sales of coolers and fridges, and a decrease in sales visits from 3 to 1. They now boast 92 percent conversion rates on all sales using Cimagine software.
Cimagine’s augmented retail provides a visualization platform that personalizes a customer’s shopping experience and accompanies them throughout their journey, dramatically increasing their confidence and allowing companies to increase sales both online and in store. Shop Direct, the UK’s 4th largest online retailer, faced a common digital retail challenge: finding innovative solutions to create a differentiated digital shopping experience that brings value to customers. Overcoming this challenge led to increased customer engagement, enhanced conversion rates, and increased online sales. Shop Direct rolled out the Cimagine viewer across the Littlewoods brand in the UK. Using their technology, shoppers can now easily view thousands of Littlewoods items, such as furniture in their homes and offices. Jonathan Wall, ECommerce Director at Shop Direct, said “Cimagine is Shop Direct’s biggest find so far… it makes it much easier for customers to visualize what they are purchasing, which leads to increased purchases, a differentiated shopping experience, that eliminates a major barrier in ecommerce sales”.
Lastly, Cimagine adds an endless augmented showroom to a store and allows shoppers to instantly view products in any design or color onsite. Limited store space means that customers often find that the product they want is unavailable. Cimagine solves this problem by easily guiding customers to an unlimited virtual showroom, providing them with a unique augmented reality experience. Sales representatives can even email products to customers or to their friends and family so that items can be easily visualized in a home or office environment. Cimagine partnered with John Lewis, the largest department store chain in the UK, and launched the world’s first augmented reality showroom in the John Lewis flagship store on Oxford Street.
So what will Snap Inc. do with Cimagine? Presumably, Snap Inc. will use the tech to further enhance campaigns like we’ve seen in the past. For example, last summer Starbucks launched a Snapchat chilled summer drinks campaign, giving Starbucks drinkers the ability to superimpose a lens over a picture of their icy Frappuccino beverage and send it to their friends. Or perhaps Cimagine’s team will support Snap in laying objects over photos and videos captured through Snapchat. This also looks like a talent grab, with Cimagine’s four co-founders each being a specialist in the fields of computer vision and image processing. Lastly, it allows Snap Inc. to tap into the Israeli talent that is known for its prowess and innovation in technology. Ori Inbar, who now runs investment firm Super Ventures, said that in his opinion Snap could keep Cimagine’s service operating. “As much as augmented reality is hot, it’s still a grind to convince customers and investors to jump in,” he said. “Snap will allow Cimagine to grow fast and expand its reach dramatically.” No matter what the reason, this is clearly a very important acquisition for Snap Inc., as it continues to grow into one of the most valuable social media companies in the world, and for Cimagine as a leader in Augmented Reality technology.