Startup businesses are slowly taking over the market and one particular enterprise has caught the attention of many consumers and entrepreneurs, especially those that have enveloped the vast virtual space.

The hottest news in corporate social media is that Snapchat, a popular mobile app among the youth, recently bought Israeli augmented reality company Cimagine Media. Sources say the estimated purchase price was $40 million.

Understanding the Investment

Cimagine is the first business venture of Snapchat in Israel. Snapchat, now Snap Inc., wanted to buy software that “allows businesses or consumers to visualize what an item might look like in their environment,” says Arjun Kharpal from CNBC. Cimagine Media — founded by Yoni Nevo, Ozi Egri, Nir Daube, and Amiram Avraham — offers exactly what they want.

Earlier in 2016, Snap Inc. also bought another startup called Bitstrips, a customizable emoji of yourself, and Flite, an advertising technology app, and incorporated them into Snapchat. Now, they’re targeting Cimagine Media, which works with online shopping websites to allow customers to visualize on their devices what the products would look like in their home or room. Snapchat also uses a similar software of Lenses and Filters, but the mobile app wants to improve on their technology even more.

Higher Stakes

The risks Snap has been making in the past year is a result of competition as more social media platforms have tried to adopt Snapchat’s mode of storytelling and content sharing through fleeting photos and videos. Instagram, owned by Facebook, was the first to hop on the trend, and Facebook also used the style on Facebook Messenger later in 2016.

Now, Snap is looking into augmented reality as an edge. They could be one of the first social media giants to have the feature as accessible as Pokemon Go. According to IDC, “augmented reality has the bigger long-term potential compared to virtual reality.” If Cimagine Media and Snap come together, the mobile app could be unstoppable.

Raising Their Value

It is rumored that in 2017, Snap could potentially sell itself to the consumers as an initial public offering (IPO) with a company value of about $25 billion. The more investments they garner, the higher their value could be in the long run.

With all the recent additions Snap has been making to its system, there is no doubt that it will be one of the essential applications for the next generations.