Snap Inc. (NYSE:SNAP) shares climbed about 4% on Wednesday after the social media group said it has formed a separate subsidiary focused on launching its upcoming augmented reality glasses, Specs.
The newly created unit, Specs Inc., is intended to give Snap’s smart eyewear division greater autonomy, a structure likened by Bloomberg News to how Waymo operates independently within Alphabet Inc. (NASDAQ:GOOGL). The move comes as Snap prepares to release its first consumer-facing AR glasses later this year.
“This structure provides greater operational focus and alignment, enables new partnerships and capital flexibility, allows us to grow a distinct brand, and supports clearer valuation of the business as we work towards the public launch of Specs later this year,” Snap said in a statement.
Snap noted that the subsidiary may seek external funding in the future, although the company stressed that the launch of Specs does not depend on bringing in outside investors. It also clarified that consumers will not need a Snapchat account to use the AR glasses, underlining the deliberate separation between the new hardware business and Snap’s core social media platform.
As preparations for the launch ramp up, Specs Inc. is recruiting for close to 100 roles globally. The creation of a dedicated subsidiary highlights Snap’s longer-term ambition to build out its hardware presence beyond its traditional app-based business.