It looks like Snap is enlisting outside help to advance its expansion into new hardware projects. The U.S. company is in talks with China-based drone maker Zero Zero Robotics over an acquisition, according to a source with knowledge of discussions.
The deal, which was first reported by The Information, is in the range of $150 million-$200 million, the source told TechCrunch. That price would represent quite an outlay, but Snap previously paid upwards of $250 million for social map company Zenly which is its most expensive acquisition to date. (Although Snap hasn’t confirmed its price for Zenly.)
Neither Snap nor Zero Zero Robotics had returned our requests for comment at the time of writing.
Zero Zero Robotics is best known for its Hover Camera drone, which is designed for taking aerial selfies and was on display at our TechCrunch China event in Shanghai last year. The device launched to the public in October, it is sold exclusively by Apple for $500 via both its online and physical retail stores.
When we first began to hear rumors that Zero Zero Robotics had been acquired by a “major U.S. company” earlier this summer, it was easy to assume that it had followed the fate of other drone companies in struggling to build a sustainable business and was seeking a soft landing. Most prominently, Lily, a Kickstarter success story, was forced to shutter earlier this year due to financial issues.
Snap does have a track record in shopping for bargains among defunct drone companies. The fact that Lily had held unsuccessful acquisition talks with Snap as an alternative to closing and that Snap reportedly did acquire drone firm Ctrl Me Robotics, which was about to shutdown, played into that theory. While increased competition from drone pioneer DJI, which announced its own take on Hover Camera, the $499 Spark drone, may well have put some heat on the Hover Camera.
However, these negotiations are not driven by failure. Not only is Snap in talks to pay a lot more than the $25 million which Zero Zero Robotics has raised from investors to date, but, according to The Information, the Chinese company actually approached Snap over a potential investment — and that turned to a prospective acquisition.
For Snap, the deal makes sense as it looks to push its hardware business on from its Spectacles product. While another, more advanced iteration of the wearable camera glasses that could include augmented reality technology is currently under development, as TechCrunch recently reported, Snap has shown a desire to get into drones as part of its broadening focus on being a camera company.
Snap is under pressure from Wall Street to show growth, which could explain why it is prepared to pay a large sum to get a product that is already in the mark. Its stock just came out of the dreaded lock-up period, when insiders are able to sell their shares, relatively unscathed, but its current value of $13.10 is well down on the $17 that it priced its IPO at in March.