Struggling Snap Considers Outside Funding for AR Glasses

The social media company finds itself outspent by bigger rivals—and needing to beckon a new generation of young people.

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For nearly as long as Evan Spiegel has run Snap Inc., his big bet has been on Spectacles, the company’s augmented reality glasses. All together, he has poured $3 billion into the effort—a fraction of what Mark Zuckerberg at Meta Platforms has invested in wearable technology, but a major expense for a company of Snap’s modest size. Spiegel still hasn’t seen a blockbuster hit.

Spiegel may be ready to ask for some help. Snap has begun to discuss ways to raise outside money for its Spectacles project so it can compete with deeper-pocketed rivals like Meta, according to a person with knowledge of the conversations. The company has considered possibilities such as raising money from outside investors to fund the development of Spectacles, much as Alphabet has done for its Waymo robotaxi subsidiary. It has also discussed a nuclear option: spinning off Spectacles—something that would greatly pain Snap, since its core Snapchat app shares augmented reality technology with Spectacles.

The discussions reflect a broad reality for Spiegel: Snap is in an unsteady position and competing with far more powerful social media rivals like Meta and TikTok. Snapchat does remain a popular messaging platform for many young people, and the company has carved out a place for itself within the creator economy through features like Spotlight, a TikTok competitor. Its subscription service, Snapchat+, has doubled to nearly 16 million subscribers over the past year, contributing to an annual revenue run rate from the offering of $700 million.