According to former employees, Blippar, one of the largest technology start-up companies in the UK, is currently burning a lot of money. But even so, its user activity is still low, and the company's business model is not yet clear.
Blippar co-founders Steve Spencer, Ambarish Mitra, Omar Tayeb, and Jess Butcher
Augmented reality company Blippar has experienced several turning points since its establishment in 2010.
Sources said that this company has burned tens of millions of dollars.
Blippar has completed £79 million in financing so far, but it will soon begin the next round of financing.
Senior staff said that only a small percentage of users are actively using Blippar applications, and the company’s revenue is almost zero.
The six former employees of Blippar’s different departments disclosed anonymously that Blippar’s publicity of its augmented reality technology and image recognition technology is not in line with the actual situation.
In an interview with the Financial Times in 2015, co-founder Ambrose Richter said that Blippar’s valuation has exceeded 1 billion U.S. dollars and has become a veritable unicorn. Mitra also once said: "For the things I am building, its influence may even be bigger than the Internet." Blippar declared, "Our technology has 65 million users." But internal staff said that the users of its main product Blippar application accounted for only a small part of the "65 million." Blippar official declined to disclose this part of the users, they said: "We will not disclose the monthly active users."
Former employees expect Blippar to burn $3 million each month.
Extended reading: 16-month loss of $31.3 million AR company Blippar seeks new round of financing
A spokesperson for Blippar stated in the statement: “As a private company, we will not comment on monthly expenditure figures and cash flow, but we can confirm that these statements are not correct.â€
The company also stated that they are focused on the "long-term vision" of their technology, which requires a certain period of development. They said: "As with all companies that have opened up new horizons, we also understand that our goals take time."
"But as we recently launched the world's first true visual discovery browser (which ultimately allows users to search by visual rather than words); a set of tools that allows anyone to DIY their own AR experience; and coming soon With a series of consumer-oriented features, we are excited about the development ahead."
1. From the Indian slums to London Unicorns
Blippar co-founder and executive director Ambriich Mitra
Blippar was founded in 2010 and co-founders include: Executive Director Ambrosi Mitra; Technical Director Omar Taib; Chief Marketing Officer Jesse Butcher; and Chief Creative Officer Steve Spencer .
As it often appears in the news media, the 40-year-old Mitra is clearly more familiar.
In an interview with Fast Company, Mitra said that Mitra, born in a middle-class family in India, left home at the age of 16 and lived alone in Delhi's slums. Later, he saw an advertisement about the entrepreneurial competition in the newspaper and won a $10,000 prize with his outstanding business plan. Mitra used this money to establish a website dedicated to women's services, WomenInfoline. According to the BBC, he led the company's successful listing. Before Mittal moved to London, England, the employees of the WomenInfoOnline were as many as 125.
According to the “Financial Times of the UK,†his story was exaggerated and retouched like a movie, and WomenInfoOnline is not actually listed. Mitra claimed that the "Financial Times" was "inaccurate" and then explained to employees in March through an internal memo that he just handed over the site to another company that has already listed. The Indian Economic Times quoted Mitla as saying that he had studied at the London School of Economics and Political Science in London. However, the London School of Economics said they did not have Mitra's admission records. Mitra later explained that his statement was wrongly quoted, and he also admitted that he did not study at the London School of Economics.
It does not matter, let it pass in the past.
Blippar's investors and employees worry not about the past but about the future.
Blippar was initially publicly promoted as an augmented reality application, but since last March it has "become" an artificial intelligence visual search engine. The company’s financing so far has been 79 million pounds (about 99 million U.S. dollars) and its valuation has reached 1.5 billion U.S. dollars. Mitra said that he rejected the acquisition of a U.S. company in 2013 because "we believe we will become one of the largest companies in the world."
This company is still best known as AR, its application allows users to scan the product packaging and then display additional content on the screen. For brands, this feature can add a layer of interactivity to product packaging. As for users, they can interact with interesting content (such as games).
Sources from both agencies stated that in the early days of Blippar, brands were very excited about their technology and were willing to pay for services. However, as the number of users continues to decline, the brand's enthusiasm has declined.
Multiple sources said that the adjustment of Blippar's strategy (from AR applications to visual search engines) has led the company into a difficult financial situation.
Mitra has said that he hopes the new Blippar can identify “trillion†objects, but it takes time and money. One source said: "As companies turned to computer vision and visual browsers, they invested a lot in engineering, but this is a huge (calculating) challenge."
This means that they need to recruit more engineers and lay off the sales department.
Last year, Blippar closed its offices in Japan, Turkey and India, but we do not know how many employees were affected. Blippar also laid off the London office. According to a personal LinkedIn profile from former Chief Commercial Officer Glen Drury, Drewley joined Blippar early last year but was abolished in less than six months.
Blippar hired British diplomat Danny Lopez as chief operating officer in May of last year. Lopez served as the British Consul General in New York and was responsible for promoting British technology in the United States. After joining Blippar, Lopez will be responsible for the company's global development.
In 2015, engineers Xuejun Xue (Tsinghua University, University of Southern California, USA) joined Blippar for computer vision.
The company has confirmed the closure of the office, but they said that currently 70 international "partners" are reselling their technology to advertisers. Blippar said in the statement: "The integration of international offices will enable us to focus our resources on areas with long-term growth potential."
2. Blippar is burning a lot of money
Two ex-employees said that they left because Blippar spent money on "burning money." They predict that the company's monthly expenditure will be about $ 3 million.
An employee said that Blippar spent the financing of 2015 in less than a year (some reports said the amount was 45 million US dollars). Information from the British Companies Registry revealed two equity transactions, one in 2013 (US$12 million) and the other in 2014 (US$25 million), totaling US$37 million.
The employee said: "They can never meet the expectations of investors."
Blippar previously said that all investor funds are already in place.
"As far as expectation goes, Blippar's team and our investors are all focused on the long-term vision, building a bridge between the physical world and the digital world, helping people to instantaneously understand the world and the opportunities around them through visual power."
The second employee revealed that Blippar will “burn out†the 2016 financing ($54 million) at the end of 2017 if it is at the current pace.
The two former employees predicted that Blippar’s monthly expenditure will be $3 million.
According to Blippar's own data, the monthly expenditure for 2016 is between 1 million pounds and 2 million pounds.
As of March 2016, Blippar’s revenue was £8.5 million and the loss was £26 million. On average, the company lost 1.6 million pounds per month in its basic business during this period.
The company’s documents also show that during this period the expenditure was 23 million pounds. That is, in the past 16 months, an average of 1.43 million pounds of negative cash flow occurred each month.
However, the cost of Blippar may increase, which means that the estimated expenditure of 2.4 million pounds per month is reasonable.
The following is the Blippar financial summary:
Blippar has so far completed £79 million in financing through high ventilation projects, real estate developer Nick Candy and Malaysian government investment department Khazanah Nasional Berhad.
As of March 2016, Blippar’s revenue was £8.5 million, up from £4.5 million in 2014.
The loss for the same period was 26 million pounds, which was higher than the 5 million pounds in 2014.
Labor costs have risen sixfold from the original 2.2 million pounds to 12 million pounds.
The number of technical staff has increased from 26 to 60.
3. Blippar's active users are low
Blippar claims that all of the company’s businesses have a total of 65 million users. A spokesperson said: “Blippar owns Blippar app, Layar app, and several branded apps that use our SDK. Our technology has more than 65 million users. We don’t announce the number of active users per month.†In the promotion last November, Blippar used a figure of 65 million.
According to the former staff, this does not mean that Blippar has 65 million monthly active users, and it does not even represent the download volume of the Blippar application. They revealed that the number of monthly active users of the Blippar app is approximately 500,000.
Blippar said: "We will not disclose the numbers of our active users because the numbers vary from month to month, depending on the number and scope of brand activities."
According to sources, most of its users come from the AR application Larair, which Blippar acquired in 2014.
Layar is still not an independent application, and it has been pre-installed in smartphones such as the Samsung Galaxy S before the acquisition. You can use this app to scan the QR code or the symbol of Layar, and then additional content will be displayed on the screen. Blippar said after the announcement of the acquisition of Layar that the deal made it "one of the world's most used consumer AR applications."
According to VentureBeat, one-third of smart phones were pre-installed with Layar in 2010. Prior to the acquisition, Layar had at least 30 million downloads.
One source admitted that its monthly active users are declining before Blippar acquires Layar. The source claimed that Blippar’s monthly active users were 518,000 in 2013 and 504,000 in 2015.
"For better results, Blippar uses Layar's numbers. They will now say 'Blippar', but most users actually come from Layar. Perhaps they are using Blippar (software development kit), but they are not routine User."
Another source said that the business team will externally say that the user volume has exceeded 65 million, but if advertisers question it, they will give true figures.
“Advertisers are obviously concerned about this. This is one of the most important feedback. The advertisers will ask the right questions. They are very concerned about the real situation. They are very vigilant about the actual number of Blippar users.â€
4. Blippar's start is good, but the development is not satisfactory
An institution that once used Blippar service stated that user participation was “extremely awful and shocking†but they refused to provide figures.
A former employee stated that depending on the promotion, user participation will be different, but in any case not enough to promote revenue growth.
The executive director of another public relations firm stated that when the app debuted for the first time, Blippar was very popular among advertisers who wanted to experiment with innovative technologies.
“Advertisers are ready to allocate innovative budgets to Blippar, when many advertisers added QR codes to their products. When you consider packaging, this is indeed a big channel of transmission.â€
The CEO added: "The early interaction rate was quite high, which left a deep impression on me at that time. But the problem is that there is little increase in user base, and the reuse rate is very low."
Cadbury used Blippar's services in 2012. After the user scans and packs through Blippar, a 30-second game will appear on the screen of the mobile phone. A senior Cadbury salesman said at the time that she "liked" Blippar very much and she was "deeply impressed" by the technology.
5. Will you download an app that specifically sells advertising content for you?
However, it is more difficult to persuade users to download applications, and this is also the beginning of Blippar's problems. Several sources said that you would download an application that specializes in promoting advertising content for you. If you scan a Coca-Cola bottle, will you open the application and scan it again?
A former employee said: "Blippar's technology is really interesting, but it's not reasonable to convince users to accept this application and use it."
External data also illustrates the same problem. According to the analysis agency SimilarWeb, the use of Blippar applications is not high. Less than 0.4% of UK Android users turned on Blippar again 20 days after installation.
In contrast, the average of other "entertainment" applications is 4.8%. It doesn't sound that bad, but if you compare it to a top-notch application such as Snapchat (updated from Blippar and also offers AR functionality), you'll find that less than 0.4% is a very bad number. As shown in the figure below, Snapchat's data is about 18%.
The number of Blippars in the United States is 0.5%, compared with 22% in Snapchat.
Blippar said that in Blippar's advertising campaign, the average user is 85 seconds.
The company added: "As for the use of Blippar outside of advertising campaigns, we are continuously improving our awareness and content experience. We know that our vision is ambitious and it will take time to realize."
6. "Unfortunately, the company is happy to change, but it's almost like spinning in place, with no real change."
According to sources, Blippar's technology has undergone several major changes and eventually formed a "hybrid business model." "Unfortunately, the company is very happy to change, but this is almost like a place to rotate, not a real change."
According to the former employee's statement and public record, Blippar's core technology has evolved in the past few years.
In 2012, Qualcomm stated that Blippar's AR technology is based on Qualcomm's AR service Vuforia.
According to the TechCruch report, Blippar acquired Layar in 2014, and Blippar’s executive director Ambrihich Mitra began to call Vuforia a “competitorâ€. The source explained: "They began to develop their abilities."
At the end of last year, Blippar once again adjusted its strategy to transform from AR to object recognition.
Now, if you open the current version of Blippar, it will lead directly to the phone camera. If you aim the phone camera at different everyday objects, Blippar can identify and provide additional information. For example, if you aim at a cup of tea, Blippar will show the definition and formula of the tea, and then there is a nearby cafe recommendation.
Blippar promised to bring facial recognition to users in December 2016, but the technology has not been officially rolled out. If you open the app, you will immediately find a reservation page for facial recognition.
Blippar admits that their strategy has changed over the years. They said: "As a company that has been established for only six years now, and as a technology company, Blippar needs to adjust its strategy according to the time it takes. This is a matter of course, and it is also very important... Therefore, with a distribution in the United Kingdom, the United States and With a world-class engineering team at the India office, we have developed our capabilities in the areas of AI, computer vision and deep learning."
7. Blippar's image recognition is just "a child who just learned to walk"
Blippar’s finances show that the time left for the company to expand its object recognition technology is running out. Experts said that the current version of the Blippar application is very limited in functionality.
According to Peter Bentley, a computer vision expert at University College London, this app is just "a kid who just learned to walk."
He said: "This is a fun toy, but it is not yet ready to become a real application. It also needs more data. The same is true for Google's continuous development of autonomous driving technology for several years. Where, they are generating more data and can learn how the road looks.(Blippar's data set is huge, but there aren't enough examples to understand what it is identifying.)
Stephen Hicks, a researcher at the University of Oxford, praised Blippar for its efforts to bring AR functionality to mobile devices, but also stated that the company will be limited to data sets.
He said: "The downside is that it tests on static image datasets. Most start-ups don't have the ability to look for real-world images from the user's perspective, so they must go back to the database."
When testing Blippar's object recognition technology, we found that this application identified the "foot" as "hand", "table" as "raincoat", and "table" as "cradle." Of course, Blippar accurately identifies the floor, record player, and coffee table.
Blippar said that when it comes to describing the world on a general level, its visual recognition capabilities are comparable to "children with 33,000 words."
The spokesperson said: “In some respects, the Blippar application has a better understanding and higher accuracy. However, it takes time to index the physical world and this process is now handled by AI. Over time, all areas are identified. It will become more accurate."
8. "But the revenue growth does not match their investment, so they need to sell this great dream again."
Where does Blippar go in 2017?
According to Bloomberg News, the company is trying to make a new round of financing, but Blippar declined to comment.
One consumer said: "People are investing (Blippar) because they believe in Mitla's story. Great dreams require a lot of money... But revenue growth does not match their investment, so they need to sell again. This great dream."
However, competitors have already been approached.
Last month, sources said: "One way Blippar will break through is to integrate technology into the camera's camera so that you don't need to open a separate application. Then, Blippar can sell the technology to mobile phone manufacturers. This is the only way. â€
Shortly afterwards, Samsung introduced the Galaxy S8, and its camera has built-in object recognition technology called Bixby Vision.
In addition, Shazam, a music recognition application with at least 100 million active users, launched its own AR platform last month.
At present, the Xiaobian is not yet clear what strategy Blippar will adopt to compete with it.
In the corporate review community Glassdoor, there are 48 reviews about Blippar. These comments are not the same, but they all include the same theme: The startup needs to develop a clear strategy as soon as possible.
An anonymous person wrote in December last year: "Without a clear vision, there is no cohesion among the teams and there is no primary engineering culture."
Another person wrote in August: "Continual innovation is good, but strategy cannot be changed every six months. It is necessary to clarify core competencies and then formulate realistic strategies based on this."
The same user finally added: "The premise is that the end of the day has not yet arrived."
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