It all started out well. Blippar was cofounded in 2010 by four people — CEO Ambarish “Rish” Mitra, CTO Omar Tayeb, CMO Jess Butcher, and chief creative officer Steve Spencer. Of the four, 40-year-old Mitra has the highest profile due to his frequent media appearances.

At the age of 16 he ran away from his middle-class Indian home and lived on his own in a shed in a Delhi slum, he told Fast Company. He won a startup pitch contest he read about in a newspaper and used the $10,000 prize to create a web portal for women called WomenInfoline. He later took the company public in an IPO, according to the BBC. And he had 125 employees at WomenInfoline’s height before he moved to London.

Blippar began as an augmented reality app for advertisers but pivoted in March last year to become an artificially intelligent visual search engine that lets users identify whatever they point their phone cameras at. It has received £79 million in investment (about $99 million in total) and at one point was valued at $1.5 billion (about £1.1 billion) in a putative takeover deal. Mitra said he rejected the offer, from a US company in 2013, because “We believe we’re going to be one of the biggest businesses in the world.”

The company is still best-known for its early AR offering, which let people scan (or “blipp”) product packaging to bring up extra content on-screen. For brands, the idea was a way to make their product packaging interactive. For users, the sell was that you could get fun content like games from brands you liked.

In Blippar’s early days, brands were genuinely excited by the technology and willing to spend money on it. But their enthusiasm has waned as user-numbers failed to materialise. The change in strategy from an AR app for brands to visual search recognition has put Blippar in a difficult financial situation, multiple sources said.

Blippar was “burning” through cash, according to records and sources
Two of the former staffers said they left because Blippar was “burning” through money, estimating spend of around $3 million a month (£2.4 million). In the 16 months to March 2016, Blippar made £8.5 million in revenue, on a loss of £26 million. On average, the company was losing £1.6 million a month over this period from its underlying business.

Acquisition could prove to the saviour. Public records said the bulk of its users come from Blippar’s 2014 acquisition of Dutch AR app Layar. Layar is still a standalone app and, prior to its acquisition, was pre-installed on smartphones like the Samsung Galaxy Smartphone S. You can use it to scan QR codes or Layar logos to bring up extra content on-screen. When it announced the acquisition, Blippar said the deal gave it “one of the biggest data footprints for consumer AR use around the world.”

According to a VentureBeat report, Layar was installed in a third of all smartphones in 2010. And prior to its acquisition, Layar had at least 30 million downloads before it was acquired. Before the acquisition boosted its numbers, one source with knowledge of the matter said Blippar’s monthly users were actually falling. This person claimed that Blippar’s monthly users were 518,000 in 2013, and had fallen to 504,000 in 2015.

Cadbury used Blippar in 2012. The chocolate brand let people scan wrappers with Blippar to bring up a 30-second game on their phones. A senior Cadbury marketer said at the time that she “loved” Blippar, and that she was “blown away” by the technology. But persuading users to download the app was harder, and that’s when Blippar’s problems began. External data tells a similar story.

According to the analytics startup SimilarWeb, people who download the dedicated Blippar app don’t use it very often. Less than 0.4% of UK Android users return to Blippar 20 days after install. That compares to an average of 4.8% across other “entertainment” apps. That doesn’t sound so bad, until you compare it with a top performing app like Snapchat, which is much newer than Blippar and also offers AR. Snapchat’s engagement rate is around 18% in the UK.

The above shows an example of not getting the model and solution correct. It’s also more than that. I bet you after reading the above, we still don’t know what Blippar does and what they are really good at. Just going in straight into tech might be sexy. Acquiring to survive doesn’t really work and this starts to be a very slippery downhill slope for Blippar.

Interesting reads:


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