Snap Inc, the company formerly known as Snapchat, has announced that it will set up its main international hub in the UK, in what is likely to be seen as a vote of confidence for British tech following the EU referendum result.
The company says it chose Britain because of the nation’s “strong creative industries” in a move that bucks the trend of US tech companies favouring low-tax jurisdictions such as Luxembourg (where Amazon is based) or Ireland (where Facebook and Apple have their International headquarters).
Claire Valoti, Snap’s UK general manager, said: “The UK is where our advertising clients are, where more than 10m daily Snapchatters are, and where we’ve already begun to hire talent.”
Although Britain has yet to leave the EU, or even begin the process by invoking Article 50, smaller technology companies have expressed fears over the likely effect Brexit, particularly a so-called “hard Brexit”, would have on the sector. However, larger firms, including Facebook and Google, have recently committed themselves to more investment in the country.
The new British company is called Snap Group Limited, following its American parent’s rebranding from Snapchat to Snap Incorporated. The name is intended to focus on Snap’s new self-image as a camera company first and foremost. “We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate,” the company tells users on its website.
That reinvention was supported by Snap’s second ever product, a pair of glasses with a built-in WiFi camera called Spectacles. The gadget, which has only been sold through custom-built vending machines temporarily installed in various locations around the US, has been a hit among fans, despite its limited availability.
Spectacles have yet to hit the rest of the world, but when they do, much of the revenue will come through the UK. A spokeswoman confirmed that Snap Group Limited will not only record revenue made in Britain, but also revenue from other countries where Snap has no local presence. The choice is deliberately intended to align Snap’s corporate structure with the firm’s business, she added.
With a stated user base of over 150m, Snapchat is smaller than seeming competitors like Facebook and Twitter, with a billion and 350m users respectively. But the company has focused on dominating a few particular niches over the broad-based reach of the larger firms, and is particularly popular among young people in Britain and the US. The company says more than 60% of British smartphone users aged between 13 and 34 are Snapchatters. Those numbers add up: research firm eMarketer estimates the company could pull in almost $1bn advertising revenue over 2017.