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Zenly is still very popular, so why did Snap shut it down? – TechCrunch

Snapchat’s parent company Snap became the latest tech company to announce major job cuts, cutting 20% ​​of its workforce worldwide yesterday, amid rumors that it affects at least 1,200 people. I have confirmed that

It’s probably obvious why Snap has scaled back so much. This is for the same economic reasons that countless other companies have laid off employees this year. The market seems to like the news, too, with Snap’s stock jumping about 15% at some point after announcing the price cut yesterday, and settling in about 9% higher than yesterday’s close.

Mass layoffs, unsurprisingly, dominated the headlines, but buried within the news were additional costs through the “refocusing” of businesses, including stopping investments in certain products. It was Snap’s plan to reduce the As part of that, I need to minify two standalone apps. One of them is Zenly, the social mapping app he acquired five years ago for over $200 million. The entire Zenly team has been laid off and the non-compete clause has been waived.

It’s not uncommon for companies to shut down apps after a few years, but Zenly’s decision to shut down entirely is surprising, especially during cost-cutting “restructuring” efforts. has been overshadowed by Snapchat and doesn’t have much direct income.

there is a map for that

Founded in Paris in 2011, Zenly raised $35 million in funding before Snap (then called Snapchat) swooped in with a multi-million dollar bid. Simply put, Zenly builds an app that allows users to see where their friends are on a map and navigate each other’s way.

But Zenly is more than just a utility. It can be defined as a social app that revolves around maps. Open the app and you will see a map with all your friends. When you see some friends playing together, you can message them or request a photo so you can see what they’re up to. While the app encourages you to stay in bed and scroll, Zenly encourages you to spend more time connecting with friends.

Zenly screenshot. Image credit: Zenly

Since the acquisition, Zenly has continued to operate as a separate entity, and it’s easy to forget that Zenly is owned by Snap. The original development team is still based in Paris, and there’s no obvious Snap branding anywhere on Zenly’s app or his website.

Just a few months ago Zenly rolled out a major update that added several new features, including the ability to search for locations. Users can also pin locations to their ‘my world’, such as favorite bars, restaurants, gyms, libraries and shops. This was Zenly’s biggest update in years as the app became a sort of modern Foursquare, allowing users to find places based on where their friends often go. When Zenly released its app update, co-founder and CEO Antoine Martin revealed that he was leaving the company, with his CEO of Snap, Evan Spiegel, taking the role.

A month later, Zenly revealed that it was going up against the mighty Google and Apple by introducing its own mapping data and engine. This is the result of a huge project that Zenly started about three years ago.

New maps from Zenly. Image credit: Zenly

As such, Zenly showed no signs of stagnation. If anything, it seemed like he could be one of Snap’s prized possessions if he could figure out how to turn it into a money-making machine.

The data also seem to support this. Zenly claims to have around 35 million monthly active users this year. According to additional figures provided to TechCrunch by Data.ai for this article, Zenly has been downloaded nearly 160 million times on Android and iOS since its launch, with 3 million of those in the last month alone. was.

Data.ai’s numbers also show that Zenly consistently ranks among the top 20 downloaded social apps globally, but digging deeper into market-specific metrics reveals that Zenly outperforms all other social apps. You will find that the performance is often excellent. In Japan, for example, Zenly is typically in the top 5 or 10 apps, but has overtaken Facebook, WhatsApp, Discord, and domestic market leader Line, as this August 19 iOS chart shows. often to pole position.

Zenly iPhone download for Japan on August 19, 2022. Image credit: apple

Elsewhere, Zenly is often the top 5 social apps in Russia and Belarus, the top 10 social apps in France, Indonesia and Thailand, and tops app charts in many other markets around the world. I’m here.

Of course, other fast-growing social apps such as TikTok and BeReal dominate Snap’s core target markets, including the US. This may be one reason why Zenly’s enduring popularity in other territories is less appealing to Snap. Still, Zenly has consistently increased user numbers quarter after quarter since the acquisition, and there’s little evidence that this trajectory will stop anytime soon, and it’s hard to ignore.

quick decision

So why did Snap choose to exit Zenly rather than try to maintain its obvious popularity in key European and Asian markets? The clue is in Snap’s own words in yesterday’s announcement. In its SEC filing, the company said it will shut down Zenly to “focus on Snap Map,” a location-focused social product launched in 2017.

Snap Map wasn’t built directly on Zenly’s technology, but it’s easy to see why you wouldn’t consider having two location-based social products. Especially when one of them has to be financially supported as a standalone product other than his main Snapchat client.

A Snap spokesperson told TechCrunch, “Going forward, we will be focusing our mapping efforts on one service within Snapchat: Snap Map. Thank you.” [Zenly] Many thanks to the team for their contributions and the support of the Zenly community. ”

This shows that Snap hasn’t given up on social mapping. In other words, selling Zenly to a third party would be unwise from a competitive perspective. Snap confirmed this rationale to TechCrunch, investing heavily in Zenly since 2017, nearly doubling the size of the team in the process, and ultimately not finding a path to meaningful revenue. Further, the company said it would not be in Snap’s strategic interest to let Zenly go into someone else’s hands as it remains focused on Snap Map.

It’s safe to say that Zenly’s popularity may have actually prevented it here. Did it When you decide to purchase Zenly, you have a vital baking global community to build from the ground up. The risks here were ultimately too great for Snap.

Internally, according to Snap, Snap Map has over 300 million monthly active users, potentially connecting each user with the 30 million businesses featured on the app. Many of them pay to advertise their listings. As an aside, it’s not clear how many of these active users are actually there for the mapping and geolocation features.Many people check when their friends were last seen online. I use Snap Map to do this.

snap map business. Image credit: snap

In summary, Snap believes they already have all the map/location things covered on Snapchat and don’t have the cash flow to continue to fund Zenly’s growth and business benefits. Not ready to let another company take over the reins as a means of protection. .

Other reductions

It was a similar fate for Voisey, the UK startup that Snap acquired in 2020 for an undisclosed sum and closed on September 5. Similar to how Snap pulled out of Zenly to focus on Snap Map. , the company revealed Voisey — which has been described as akin to “TikTok for making music,” but has been transformed into Sounds, the music feature Snap launched within Snapchat two years ago. Give way to full concentration.

Elsewhere, Snap has confirmed that it will stop investing in many features and services, including Snap Originals and Minis. Also, Snap’s mini-hi drone project Pixy, which he just announced in April, is also headed the Dodo’s way, as reports suggested a few weeks ago.

This helps highlight how quickly the tides of snap have changed. In the space of the last four months, Pixy has sunk from an exciting (if disconcerting) new hardware project, and Zenly has swept the waves. From the top of the world to the brink of extinction.

But I saw this coming. Snap’s active user base may continue to grow, but this is not reflected in our financial performance, which is largely driven by the current economic climate. In its second quarter results in July, Snap wrote to investors:

The continued growth of our community increases the long-term opportunities for our business, but our second quarter financial results do not reflect the scale of our ambitions. Despite the current headwinds, we are not satisfied with the results we are providing.

In addition, Snap said at the time that it would cut operating costs and lower hiring rates. The company also declined to provide guidance on future financial performance due to “uncertainties related to the operating environment.”

Therefore, some casualties were to be expected from all this. But it’s all sorts of sad news, especially for those directly affected by the layoffs.

Zenly may have gone unnoticed by many people (especially in the US, where users are relatively few), but it is undoubtedly a major success story in Europe. Zenly inspired a new generation of European entrepreneurs, made a huge impact on his ecosystem of French tech, and solidified his Snap reputation in France. The Zenly founder has proven that he can build a European social app with tens of millions of users. BeReal shows that this is still possible today.

Given the right circumstances, Zenly could have done even more, so coming to such an abrupt and premature demise is a big farce.

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