Snapchat's success is not ephemeral, although its mobile messaging app is based on that very concept. The social media platform is reportedly raising more funds in a fresh round of investment, putting the company's valuation at $20 billion or up to $22.7 billion, TechCrunch reported citing multiple informed sources and documents obtained by venture capital (VC) experts.
Snapchat, built on the concept of disappearing messaging, photos and videos after they have been viewed and read by the recipient, is said to be seeking about $200 million in the latest funding round, the sources said. The latest fund influx follows a $175 million Series F funding led by Fidelity Investments in March, which put Snapchat's value at $16 billion â€” unchanged from its 2015 valuation.
Snapchat had raised over $500 million last year, which valued the company at $16 billion, up from $10 billion in December 2014. The social media giant has raised $1.4 billion so far in funding from its investors. Other than Fidelity, Snapchat investors include Alibaba, Lightspeed, Benchmark, Kleiner Perkins Caufield & Byers, Coatue Management, General Catalyst, Saudi investment group Kingdom Holding Company, KPCB, SV Angel, Tencent and Yahoo.
Snapchat is among the most valuable unicorn startups â€” those valued at $1 billion or more. The platform has about 100 million daily active users and 65 percent users send a photo or a video 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.
Snapchat started off as an app for teenagers, but has since grown into a fully featured messaging app, attracting major advertisers and publishers. Facebook had offered to buy the company for $4 billion almost three years ago, but the company's CEO Evan Spiegel had declined, for which he was criticised heavily.
The company has also been exploring new fields such as virtual reality (VR) and wearables. According a report in March, Snapchat has almost a dozen wearable technology experts and industrial designers hired from places like Nokia and Creative.