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Some thoughts on acquisitions

Wednesday 21st May, 2025

This deal broke the internet today.

TLDR:

• OpenAI is acquiring io - a 2yr old, pre-product, pre-revenue, 55-person startup led by Jony Ive

• Jony is the most influential designer in tech history (led design of the iPhone, iOS, iPod, iPad, Apple Watch, and most likely whatever else you’re reading this email on)

• Jony and Sam secretly co-founded io 2 years ago, imagining what a consumer device designed specifically for AI could be

• Jony and his team will now lead all creative and design work at OpenAI

Here’s where it gets quirky: it’s an all-equity deal valuing io at $6.5 billion (or $118 million per employee - potentially the highest ever…?)

After about 2 hours of sniffing around X for memes and hot takes, I ended up tumbling down a rabbit hole of other frame-breaking acquisitions.

Not just the ones that generated the largest returns…

… but also the creativity behind the acquisition strategies shaping today’s most defining companies.

Like Slack - aggressively consolidating standalone apps for things like docs, screensharing, and employee directory into their core product, allowing them to rapidly shortcut their ‘feature gap’ with incumbents like Microsoft and Google.

Or Atlassian - buying, stacking, and combining a string of fast-growing collaboration tools (Bitbucket, Trello, Loom, etc) into one of the most efficient bundle / platform / cross-sell / PLG strategies in all of SaaS.

(Future breakdown ideas? 👀)

But the one that caught my monkey-brain in a Perplexity-loop for the rest of the day was Snapchat.

Snap Inc (Snapchat, Spectacles, Bitmoji, etc) could be the most underappreciated tech acquirer out there.

When you break it down, their entire business is an amalgamation of acquired startups.

→ Here are the 33 deals that shaped the Snapchat used by 900 million monthly active users today:

1. AddLive (2014) - $30m
   Became Snapchats ‘Video Chat’ feature.

2. Vergence Labs (2014) - $15m
   Became ‘Spectacles’, Snapchat’s smart glasses hardware line.

3. Scan.me (2014) - $50m
   Became ‘Snapcodes’, Snapchat’s personalised QR code feature.

4. Looksery (2015) - $150m
   Became ‘Filters’ and ‘Lenses’, Snapchat’s facial recognition and modification technology.

5. Bitstrips (2016) - $64.2m
   Became ‘Bitmojis’, Snapchat’s personalised avatars.

6. Obvious Engineering (2016) - Undisclosed amount
   Became Snapchat’s ‘3D Selfies’, powering face swaps and other AR overlays.

7. Vurb (2016) - $114.5m
   Became Snapchat’s local business search and discovery features.

8. Flite (2016) - Undisclosed amount
   Became Snapchat’s interactive ad tech powering 360° video ads and vertical video ads.

9. Cimagine (2016) - $30-40m
   Became Snapchat’s AR product visualisation features.

10. Ctrl Me Robotics (2017) - <$1m
    Became part of Snapchat’s hardware team.

11. Placed (2017) - $135m
    Became Snapchat’s ad tracking for foot traffic and conversions in physical stores.

12. Zenly (2017) - $213m
    Became ‘Snap Map’, Snapchat’s interactive social maps.
    (I wrote one of the first Strategy Breakdowns on Snap Map - read it here).

13. Strong.Codes (2017) - Undisclosed amount
    Became part of Snapchat’s code protection technology.

14. Metamarkets (2017) - <$100m
    Became Snapchat’s analytics dashboard for advertisers.

15. PlayCanvas (2018) - Undisclosed amount
    Became part of Snapchat’s ‘Lens Studio’, where developers build AR Lens effects.

16. Teleport (2018) - $8m
    Became part of Snapchat’s ‘Filters’ technology, powering features like hair colour changes.

17. AIFactory (2020) - $166m
    Became ‘Cameos’, Snapchat’s animated selfie video feature.

18. Voca.ai (2020) - $70m
    Became Snapchat’s Ai-based voice agents for customer support.

19. Voisey (2020) - Undisclosed amount
    Became Snapchat’s music creation and sharing features.

20. Screenshop (2020) - Undisclosed amount
    Became Snapchat’s product recommendations based on images saved to ‘Memories’.

21. Ariel AI (2021) - Undisclosed amount
    Became part of Snapchat’s AR experiences team.

22. Fit Analytics (2021) - $124.4m
    Became Snapchat’s virtual clothing try-on and sizing features.

23. StreetCred (2021) - $124.4m
    Became part of the location data platform powering Snap Map and other AR experiences.

24. Demand Sage (2021) - Undisclosed amount
    Became part of Snapchat’s ad reporting and analytics features.

25. Pixel8earth (2021) - $7.6m
    Became part of ‘Local Lenses’, Snapchat’s location-based AR experiences.

26. WaveOptics (2021) - $500m
    Became Snapchat’s AR display manufacturing team.

27. Vertebrae (2021) - Undisclosed amount
    Became Snapchat’s self-service system for brands to manage AR versions of their goods.

28. Popwallet (2021) - Undisclosed amount
    Became part of Snapchat’s mobile advertising network.

29. NextMind (2022) - Undisclosed amount
    Became part of ‘Snap Lab’, Snapchat’s AR hardware research team, working on brain-computer interfaces.

30. Forma (2022) - Undisclosed amount
    Became part of Snapchat’s virtual dressing features

31. Compound Photonics (2022) - Undisclosed amount

    Became part of Snap’s AR hardware R&D team, building microdisplays for Spectacles.

32. Th3rd (2023) - Undisclosed amount
    Became part of ‘AR Enterprise Services’, creating Snapchat’s 3D digital product twins solution.

33. GrAI Matter Labs (2023) - Undisclosed amount
    Became Snapchat’s division for advanced AI/AR chip development for wearables (i.e. “Neuromorphic computing hardware”).

Wild.

I appreciate that for most of us (besides the 13% of you working in Corp Dev), we’re not exactly hunting for hardware startups to drop $500m on.

So I wanted to leave you with something to chew on (not just dream about chewing on).

Here’s my prediction:

→ AI agent acquisitions will become a defining strategy for internet businesses over the next 5 years.

SMBs, startups, scaleups, and enterprises alike.

I’m not talking about an agent that researches inbound leads and sends you a Slack summary of their LinkedIn activity (although they are pretty handy!)

I’m talking about acqui-hiring agent swarms.

Imagine using last month’s profits to acquire an entire Inbound SDR team:

• Qualifying inbound leads using deep research and ICP template mapping

• Nurturing leads with models fine-tuned on transcripts of the world’s most efficient salespeople

• Scoring and prioritising based on semantic AI analysis of lead conversations

• Handoff to other agent swarms for closing, delivery, customer success etc.

• Logging and reporting for visibility and continuous orchestration optimisation

Fully out-of-the-box.

→ Spend 1 week configuring.

→ 2 weeks improving.

→ 1 week preparing for next month’s acquisition.

Things are about to get jazzy.

Bit of an experiment this week.

I wrote the entire email in 1 sitting.

Top-to-bottom.

OpenAI to Snapchat to agent swarms.

No constraints.

No thesis.

No edits.

Just a day’s worth of freeform observation + speculation, delivered straight from my browser history to your inbox.

What did you think? Y/N?

— Tom

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