Snapchat settles ownership dispute with co founder Reginald Brown
10 Sep 2014
Snapchat yesterday settled its cofounder dispute that had been hanging over the company for months, even as it raised new funds at an eye-popping $10 billion valuation, Forbes reported.
CEO Evan Spiegel and CTO Bobby Murphy of the company, whose popular app allows users to send photos and short videos that disappear from devices and servers after a short while, had raised $20 million from legendary Silicon Valley venture firm Kleiner Perkins Caufield & Byers.
With the company's $10 billion valuation Spiegel, 24, and Murphy, 26 owners of an estimated 15 per cent of Snapchat each saw their net worth zoom to around $1.5 billion each.
However, their wealth came under the shadow of a lawsuit from their old Stanford colleague Reggie Brown, who claimed he came up with the initial idea for the app, which was first called Picaboo, and was then unfairly shut out of the riches.
With much of the tech community taken up with the launjch of Apple Watch, Snapchat has quietly settled Brown's dispute. Though the terms of settlement were confidential, Brown is likely walk away with much less than an equal share.
With the settlement, Brown's claim of an ownership interest in Snapchat had been resolved on mutually agreeable terms. It also resolves Brown's suit filed in the Superior Court of Los Angeles, as also all other disputes between the parties, Snapchat said in a statement.
In a 2013 filing in the Superior Court of the State of California for the County of Los Angeles, Brown claimed that while at Stanford, he came up with the idea in 2011 of a mobile device application that would allow users to send pictures to others that then quickly disappear from the recipient's mobile device.
He shared the idea of the application with Spiegel for a joint venture or partnership to commercialise it. The filing said, Murphy joined as the coder of the application.
Brown however, found himself improperly excluded from all participation and profit in the joint venture or partnership, only a month after the app, then called Picaboo, was publicly launched in July 2011, the filing said. The name of the application was changed in September 2011 to Snapchat.
The Snapchat statement quoted Spiegel as stating that "we acknowledge Reggie's contribution to the creation of Snapchat and appreciate his work in getting the application off the ground."
