Failed ICO, Token Sale Project SNIPs Acquired by Sonos for $37.5 Million

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    Snips, an edge-based voice platform that enables enterprises and developers to create Private by Design voice assistants, has been acquired by Sonos for $37.5 million. The purchase price is well below the valuation of $50 million assessed in its previous funding round in June 2017. but it does surpass the reported $18.5 million invested in the company to date.

    Founded in 2013 and based in Paris, France, the Snips team, comprised of over 50 talented engineering, machine learning and product development professionals, has built a leading platform and tools for creating tailored voice experiences. Its full-stack solution is built with proprietary technology allowing for voice processing on the device. This localized processing maximizes accuracy, efficiency and privacy while minimizing footprint and cloud dependency. Snips’ voice assistants are custom-built for specific tasks and designed to run alongside other general-purpose voice assistants currently on the Sonos platform.

    In a letter to shareholders, Sonos CEO Patrick Spence wrote the acquisition was motivated by improving the voice user experience on its devices but that it does not plan to compete directly with “big tech” and their “ask anything voice services” but instead will focus on device control features and music.

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    “Today we announced the acquisition of Snips SAS for approximately $37.5 million in cash. This is our first acquisition as a public company and we are pleased to bring on a talented team that will support what we do best — making the Sonos experience better for our customers. Snips is an AI voice platform for connected devices that provides private-by-design voice technology, and the Snips team will bring expertise and strategic IP that will make the voice experience on Sonos even better. We do not plan to replicate the big tech ‘ask anything voice services’ but expect this acquisition will add to our customers’ ease of use and control as we continue to differentiate an end-to-end Sonos experience for our customers. This tailored experience aligns with external research showing that the most popular use for voice assistants is to access music.”

    He also noted in a press release:

    “Millions of people have come to enjoy the ease of controlling music with their voice. Today’s announcement gives us the added talent and technology to create an even more differentiated and immersive experience for customers, both inside and outside of the home,” said Patrick Spence, CEO of Sonos. “We’re excited to welcome an incredible Snips team to the Sonos family to help bring this vision to life.”

    Dr. Rand Hindi, co-founder and CEO, said:

    “I am extremely proud of the team and the work we have accomplished over the last five years. The technology we have created has been validated by one of the leaders in consumer electronics. I am thrilled that, joining an international company, Snips will continue its operations in France, helping French technologies succeed at an international level.”

    Snips attempted and cancelled a token sale in 2018 which was documented by co-founder Rand Hindi at their Medium blog in a post coined “5 Lessons from a Failed Token Sale”.

    “The reason we got into blockchain at Snips was not for fundraising. Rather, we found it to be an elegant solution to a challenge we faced as a company: how can we incentivize our developers and users to self-organize in order to create a vibrant voice ecosystem? To us, a token had nothing to do with currency or fundraising; rather, it was a product feature that enabled us to run our app store as a DAO.”

    “With that definition in mind, we can separate the concept of a token from that of an ICO. If a token is an item that can be sold, then an ICO is just a way to pre-sell these tokens. But theoretically, we don’t need an ICO to sell tokens, and we could just as well have listed the token on an exchange to be sold over time.”

    It is also important to understand why ICOs were created in the first place. Back in the early days of blockchain, projects were mostly open-source and structured around a foundation. As such, founders could not raise venture money (they did not have a company from which to sell shares!) and thus had no other way to finance the development of their project than to do a crowdfunding campaign, aka an ICO. But at Snips, things are different: we are a venture-backed company, with over €22M raised to date and a Series B underway. We actually don’t need the money upfront to build the token, because we have money in the bank already. This means we also never needed to do an ICO in the first place.”

    Snips was co-founded by three Ph.D.s – Rand Hindi, Michael Fester, and Maël Primet in 2013. The company, a graduate of the 500 Startups accelerator, kicked off with $6 million in funding led by Eniac Ventures, followed by $1.7 million from undisclosed investors, and in June 2017 a larger $13.45 million round led by Korelya Capital and MAIF Avenir. 

    According to writer Bret Kinsella from Voicebot.ai, SNIP maintained a high profile as a solution for on-device voice control that did not require cloud access which contrasted with Amazon and Google where every voice assistant conversation is processed in the cloud and there are significant privacy risks. 

    “Snips accomplished its local voice navigation by deploying small speech dictionaries on the devices themselves. This meant the Snips natural language processing (NLP) couldn’t understand all speech or even a wide variety of speech but rather specialized in a narrow dictionary where it could excel. For example, voice controls for a coffee maker or for more complex tasks like music search were enabled as demonstrated in the videos below.”

     

    Sonos (Nasdaq: SONO) is one of the world’s leading sound experience brands. As the inventor of multi-room wireless home audio, Sonos innovation helps the world listen better by giving people access to the content they love and allowing them to control it however they choose. Known for delivering an unparalleled sound experience, thoughtful home design aesthetic, simplicity of use and an open platform, Sonos makes the breadth of audio content available to anyone. Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.


    Also published on Medium.