It seems as if, at last, Snapchat has made a name for itself in the world of mobile applications. Snapchat has been valuated at $20 billion dollars so it looks as if this once tiny start up isn’t going anywhere any time soon. Snapchat was valued at $16 billion just the year before. Snapchat is trading at $30.72 per share and the more recent valuation could be around $22.7 billion. The startup is “always raising” on a “rolling” basis, partly because investors are so interested.
“They get offers all the time,” one investor close to the company said. “And once you start to grow on this path, many people come to give you money. You don’t know how to value the company, so the best way to do that is to do some kind of rolling funding. When you have a hot company and many people are approaching you, you do a market of discovery.”
Other startups obviously do not normally show anything as extreme as these gains. This just shows Snapchat’s fast growth and the progress that this company is making. They have shown much interest in trying out new things like QR codes to connect to accounts and content, their crazy face-changing filters and more. Some huge companies that are huge shareholders include but are not limited to Fidelity, Alibaba, Coatue Management, and General Catalyst. We hear that many existing investors are looking to participate in this new round of investing, including Spark Capital. Snapchat declined to comment on the newer fundraising. Sources close to the company confirmed that a previous round had already closed earlier this year at a valuation different from the $20 billion we’ve been hearing.
Snapchat, the once small startup that is based out of Los Angeles, has shown rapid growth ever since its founding in 2011. It has gotten more and more technologically advanced and in recent times has added different filters in which users can alter their faces or document interesting events taking place in their lives. This application was once simple ways to keep in touch, but has now blossomed into a social media powerhouse. While there is no question that Snapchat is gaining traction, particularly with the millennial demographic, the hefty valuation can be risky. The higher the company is valued, the less likely companies could afford to purchase shares of Snapchat.
Fidelity has continued to buy shares of Snapchat and even when it slipped slightly last fall, it didn’t stop them from acquiring more shares this spring.
It is also possible that it will continue to make acquisitions to fuel growth. Snapchat recently acquired Bitstrips for $100 million in recent months.
The new round would bring Snapchat’s total funding to over $1.5 billion. This just doesn’t show many signs of slowing down.