What:App SnapChat raises US$537.6 million, reaching an estimated US$16 billion valuation which makes the company one of theworld’s most valuable startups.
Why it matters: Snapchat is growing fast internationally, including in parts of Latin America. Snapchat still has to face competence from big players like Whatsapp and Facebook own chatting service , which have led the company to consider a possible IPO in the nearest future in order to get more financing.
Photo-messaging app Snapchat has raised around US$537.6 million, after the US$200 million it had already raised in March.These numbers suggest that Snapchat might pull in another US$112.3 million in funding, bringing its total for this year alone to US$850 million.
With this latest funding, the company would be valued at a US$16 billion, making it one of the world’s most valuable startups, behind Uber and smartphone maker Xiaomi.This valuation would also place Snapchat firmly in the company of a select handful of apps that have ridden virality to stratospheric valuations.
“Snapchat is growing fast internationally in parts of Latin America and in Saudi Arabia. The emerging world, however, has not adopted the service. “It’s not data-light”, you have to afford to pay for the data,” Emily White, COO of Snapchat, recently told Wired. However, she offered no update on how many people are using the service overall.
Snapchat is growing fast internationally in parts of Latin America and in Saudi Arabia. The emerging world, however, has not adopted the service.
Snapchat, which was founded in 2011, allows users to take photos and videos that self-destruct after a set time.The app has seen a rapid rise in its popularity, powered especially by a key advertising demographic: teenagers and millennials in the developed world. According to research firm ComScore in March, 71 percent of its US users are 18 to 34 years old.That is why the app is hard for third-party services to measure because so many of its users are under age 18, an age beneath which many services don’t track. The company has offered no official update since May, when it confirmed that 700 million photos were shared daily, and stories were being viewed 500 million times a day.
Messaging services are becoming some of the most highly valued startups in the industry. Last year, Facebook paid US$19 billion for WhatsApp.
Evan Spiegel,Snapchat’s 24-year-old CEO,disclosed publicly for the first time that the company has been considering going public. It is clear the app knows hor to raise money but not how to make it.
A report in January concluded that 200 million people actively use Snapchat, up from 100 million users last August. That’s still far less than WhatsApp’s 800 million active users or even the 600 million people who use Facebook’s own chatting service called Messenger.Snapchat has helped the company raise cash from some big names in Silicon Valley. Venture capital firm Kleiner Perkins Caufield & Byers invested US$20 million within the last year and Chinese e-commerce giant Alibaba made a US$200 million investment in the company in March that valued the company at US$15 billion.
The company has generated little revenue, despite various efforts to attract advertisers. In January, it launched Discover, a feature that allows delivering videos created by major companies such as CNN, Yahoo News, National Geographic, the Food Network and ESPN, among others.