Two and a half years ago, the Snapchat mother bought the Berlin AI specialist Fit Analytics for a lot of money. Now the business is being discontinued – for strange reasons.
At the Berlin startup Fit Analytics, all employees have been laid off. The start-up scene learned this from corporate circles. It is said that the layoffs affected a higher double-digit number of employees. The company specializes in the AI-based calculation of clothing sizes and was taken over by the US social media group Snap just over two years ago. The Snapchat mother paid the equivalent of around 124 million euros for the takeover.
Snap stomps AR department
Snap has not yet responded to a request from Gründerszene. However, the group said in a statement that it had largely discontinued its activities in the area of augmented reality. “After exploring our options over the last few months, it became clear that we would need to make significant additional investment to expand our enterprise offering for retailers. “We simply cannot afford these investments at this point,” said Snap founder and CEO Evan Spiegel. As a result, 170 employees were separated.
Spiegel cited, among other things, the new technical possibilities offered by generative AI tools such as ChatGPT as the reason for the layoffs. This makes it more difficult for Snap to sell its products. On top of that, due to the recent difficult business development, the group had to concentrate on other business areas, such as advertising. Snap shares have lost almost 90 percent of their value since their peak in September 2021. It is currently trading at around eight euros.
Known for messenger app
Snap is best known for its messenger app Snapchat. It was once known primarily for the images that disappear on their own, but the app’s functions have now been greatly expanded. Among other things, Snap relies on so-called augmented reality (AR), in which virtual objects on the screen are inserted into the real environment. This became more popular, especially during the pandemic, for trying on clothes or shoes.
The takeover of the Berlin startup Fit Analytics in spring 2021 therefore seemed logical. The company was founded in 2010 by Asaf Moses and Sebastian Schulze and counted fashion companies such as Tommy Hilfiger, Calvin Klein and The North Face among its customers.