Snapchat reportedly turned down offers from Facebook and Google earlier this year, and now it looks like they did so for good reason.
Snapchat is one of the most unstoppably popular messaging and photo sharing services on the Internet. Having already turned down acquisition bids from Facebook and Google valued somewhere in the $3-4 billion area – the company is readying itself for another round of funding.
Even more impressive is the fact that Snapchat – a company that has not monetized its user base yet – is valued at $10 billion. This latest shot of funding though – to the tune of $20 million – is something that Snapchat is entirely used to.
Investors are crazy about Snapchat and crazy about the idea of investing in the IM service. Big moves like this often have big payouts when push comes to shove. And now, as investors see just how the value of the startup is growing – turning down those acquisition offers by Facebook and Google don’t seem as crazy as they once did.
Yahoo’s Marissa Mayer is the individual behind the influx of funds in Snapchat, and she’s no stranger to successful investment moves – like this as companies start to grow at a massive clip.
All current indications would point to Yahoo trying to “recreate” their investment move with the Chinese giant Alibaba, which was an original $1 billion investment that paid $9.4 billion 9 years later. The initial investment took place in 2005, and at the time the investment was worth a 40% stake in the company. When the company went public, the shares were sold, Yahoo had massive profit.
According to the numbers, amongst millennials Snapchat is the third most popular mobile app, after Facebook and Instagram. Last year, the messaging service made headlines by noting that they had 100 million monthly users, and even with the dark cloud hanging over the startup that is “teenage sexting,” and being used as a medium to bully – what we’re ultimately talking about is – like any tech company like Google, Facebook, Twitter, or any other service, there are questions about security and safety.
However, Snapchat users aren’t getting too caught up in the fact that the startup has admitted that their platform isn’t the safest way to share photos. The app is still insanely popular, and this latest round of investment is proof that it has a very viable, and lucrative future ahead of it.