Snapchat raised $175 million (around Rs 1,177 crore) in its latest round of funding from Fidelity Investments and other investors. Despite the new funding, the company's valuation remained unchanged from that of last year at $16 billion (around Rs 1,07,630 crore), people familiar with the matter told the Wall Street Journal on Thursday.
Fidelity Investments bought Snapchat shares at $30.72 per share in February, which was the same price it had paid in March last year, the WSJ reported. Snapchat's stagnant valuation is bit of a concern as it appears the investors may be reevaluating their expectations with the company, according to Reuters.
Snapchat's $16 billion valuation makes it the sixth largest venture-backed company in the world. The new funding comes at a crucial time when other tech start-ups are facing the crunch from investors' decelerated fund-raising, forcing them to take money at a lower valuation.
In 2015, Snapchat raised over $500 million in a funding that put its value at $16 billion, up from $10 billion in December 2014. Snapchat started raising funds with the Series F financing round last year and Fidelity's funding is an extension of the same. The ephemeral messaging application has raised $1.4 billion so far, according to a Re/Code report.
Snapchat is quite popular in the large pool of social media apps and has more than 100 million users viewing 8 billion videos every day. The company is yet to establish a profitable business model as it currently generates revenue with sponsor videos and photos in its Live Stories section and through its lens store
Fidelity's funding in Snapchat comes on the sidelines of the Boston-based asset manager's decision to write down its investment in one of Canada's highly valued tech start-ups, Hootsuite Media, by 18%, Bloomberg reported Thursday. Fidelity was the lead investor in Hootsuit's $60 million fund raising in 2014, which put the start-up's valuation at $1 billion.
Fidelity marked down its stakes in several software start-ups in January, keeping its prime interest in social media companies like Snapchat, Pinterest, Uber and Airbnb.