Snapchat, a Venice, Calif-based social platform is rumored to be raising $200 million, thanks to whiplash inducing growth in its popularity and partly due to amorous overtures from Facebook(s FB). According to my sources, the new investor interest in Snapchat and its photo-sharing service is coming from a handful of hedge funds, including Naspers, the South African holding company that has invested in Tencent and a wide variety of web and media properties around the world and owns MIH. Snapchat spokesperson is yet to respond to our queries.
Snapchat is being valued in excess of $3.5 billion, reports AllThingsD. We have been able to confirm this valuation as well. One source tells us that some early investors might be sellers in this round of financing. That number has been doing the rounds in Silicon Valley for a few weeks now.
The company had raised $13.5 million in Series A funding in February from Benchmark Capital and was valued at around $70 million. (In that case, I was right about the firm, wrong about the valuation.) Later in June, I had reported that Snapchat was raising $100 million at a jaw dropping valuation. A few days later, Snapchat closed $60 million in Series B funding from Institutional Venture Partners and other investors in June 2013 and at that time was valued at $800 million. (I guess I was right about the valuation, but off on the total capital raised — so take into account my error rate on the funding rumors around Snapchat.)
The growth in the company’s valuation is coming from its sustained popularity and continued growth. In February 2013, its members were sharing 60 million snaps a day and in June 2013 it was about 200 million snaps a day. CEO Evan Spiegel, co-founder of the company, noted at a recent event that its community was uploading 350 million snaps every day. Some say its growth and size is rivaling still red-hot Instagram.
Since then it has rumored to have received and rejected a buyout offer from Facebook. Spiegel isn’t a big fan of selling or Facebook. The social giant is rumored to have made a $1 billion dollar-plus offer for Snapchat, sources in Silicon Valley say. A Facebook spokesperson, not surprisingly, declined to comment.
Snapchat is growing really fast, but like many such fast growers has no revenue. But, I guess just like Instagram, when it is big enough it can turn on the ad spigot or could eventually plan to charge for some premium features.