15 ms·

When a company like Uber is raising insane amounts of money I think to myself - "ok, they're working on vehicle automation and other ambitious projects, it make

• intro-b 10y ago
  hey now those new filters won't make themselves
• adamnemecek 10y ago
  They have captured an important segment of the market (12-2x years olds). I also think that people In this age group find it a ton more engaging than the alternatives.
  • samfisher83 10y ago
    FB really made it when the captured the old people. The issue is the the 12-20 years are quite mercurial. 15 years ago it was AIM,MSN, Yahoo chat, then myspace, then facebook. Now its snap chat and instagram. Its hard to keep the market since when you get friend request from Mom or Dad do you really want to be in that social network anymore?
    • delecti 10y ago
      I don't think 12-20 year olds are that mercurial, it's just a small age range, so in 8 years it will be an entirely new group of people. Fifteen years is nearly two full lengths of that duration, so it's no wonder that AIM/MSN/Yahoo aren't in use by the current 12-20 year olds. It's only very recently that I (a 29 year old) finally phased out AIM in favor of other channels. Once you capture a social group, it's fairly stable, there's just a constant stream of new social groups as each year's new 12-20 year olds start going online.
      • argonaut 10y ago
        That's the very definition of mercurial. In 8 years it'll be a new cohort with new tastes.
        • delecti 10y ago
          The 12-20 demographic is mercurial, but 12-20 year olds are not. Though really my point was this: it isn't the case that you need to continually re-grab the same users, it is the case that there are continually new users to grab.
          • argonaut 10y ago
            If the old users leave, then yes, there are continually new users to regrab.
    • mrep 10y ago
      > The issue is the the 12-20 years are quite mercurial. I don't think we are mercurial but that we have less experience and therefore are much more willing to try new things. Snapchat is way better as an outlet to post more regular things you are doing to your friends because it is ephemeral. Why? Because we all look back and see all the stupid stuff we posted when we were younger. The only reason I haven't deleted my facebook to delete all of that old stuff is because Facebook's other offerings are pretty good. While I hardly know anyone that posts regularly to facebook anymore, almost everyone uses facebook messenger and groups to communicate in isolated groups. Snapchat has been blowing up because it fills that niche of "I want to post more updates about my life without really having to worry about how those updates will be interpreted in the future".
      • samfisher83 10y ago
        I hope you don't believe that. You never know when someone saved something.
        • deleted 10y ago
          [deleted]
        • mrep 10y ago
          Have you never made a joke before that some random person might not like and get offended by it and try and attack you for it? Have you never said something that you have looked back upon and regretted saying it (whether you were just young and immature or just not thinking clearly)? Do you also not do those things over common communication channels outside of talking face to face? I'm genuinely curious because I literally don't know anyone under 30 that has never done anything that they did not want recorded in history forever. It's not that I have posted anything on facebook/instagram/snapchat... that is really that bad/embarrassing. If it were all posted on the front page of the NYT I would probably go through life just as normally (albeit, quite a bit embarrassed by it). I would just prefer to minimize that risk. That's where snapchat fills the niche. It allows me to speak more freely with others with less fear that everything I say and do will be pulled up years later completely out of context.
  • cstejerean 10y ago
    Sure, but what precisely are they planning to spend $4B on?
    • TAForObvReasons 10y ago
      Building a war chest to purchase the next company or act quickly. You need to have the cash on hand, and that can't happen overnight. They need not spend the money today.
      • josho 10y ago
        That's typically a bad reason to give to an investor.
    • CN7R 10y ago
      Considering Snapchat revealed Spectacles, which in my mind was an unexpected hardware development, they could use funding for side projects and expansion. Hopefully, they don't become like Twitter and waste all that money for so little gain.
      • adamnemecek 10y ago
        I'm pretty sure that they will write these off evetually. To me they feel very similar to Google glass insofar the customer bases being somewhat similar, maybe spectacles' being somewhat younger.
        • CN7R 10y ago
          IMO, Google glasses were an obtrusive form of eyewear with limited AR capabilities—with a price tag of $1500. Spectacles are $130.
          • adamnemecek 10y ago
            You are right they are quite a bit cheaper but they are just as obtrusive. I think that glasses (esp. dioptric) are fundamentally a part of your identity and I think that most people fundamentally hate associating themselves with a company not to come across as a 'fanboys'. Like wearing the snapchat glasses projects a certain type of persona which I think most people might prefer not to project. I think that they should be marketed as "cool glasses (that also record video)" as opposed to "video recording glasses". "Video recording glasses" are a gimmick, "cool glasses (that also record video)" could be timeless.
  • flukus 10y ago
    Is it that important? That age group isn't known for it's disposable income.
• kak9 10y ago
  Uber does not need the amount of money it raises because of vehicle automation. That's a relatively tiny portion of their spend.
  • chejazi 10y ago
    Where is the bulk of their spend? Hiring? Lobbying local jurisdictions?
    • TeMPOraL 10y ago
      I would imagine the latter. Conducting an illegal business in the open must be expensive.
    • CN7R 10y ago
      Subsidies for drivers as Uber attempts to expand market shares overseas and maintain dominance over domestic competitors: https://www.bloomberg.com/news/articles/2016-08-25/uber-loses-at-least-1-2-billion-in-first-half-of-2016 https://www.bloomberg.com/news/articles/2016-08-25/uber-lose... Honestly, the China gamble Uber had earlier this year shows me that they're spreading themselves too thin.
• necessity 10y ago
  Snap is working on Spectacles and other "real life" projects.
• bcherny 10y ago
  Hopefully someone can chime in with actual numbers, but (1) engineers/designers/product, (2) marketing, (3) servers/infrastructure.
• wmeredith 10y ago
  Someone has to be the next Twitter.
• onewaystreet 10y ago
  It's better to raise more than you need when you are in a position of strength.
• DenverR 10y ago
  It's less about raising funds and more about liquidity for current shareholders
• AndrewKemendo 10y ago
  The engineering community is sleeping on Snapchat, but shouldn't be. My life is AR. I'm the CEO for an AR company, I speak write and live and breathe all things AR. Snapchat is poised to be the most important AR company around for several reasons. 1. They have a MASSIVE userbase that is comfortable with sharing their lives 2. That userbase has already shown an interest in AR - and yes whether you like it or not their filters are on the AR spectrum - the filters system maps, tracks (SLAM) and modifies in real time. Their Spectacles release has the potential to build the largest real world image dataset on the planet - something needed (for reasons I won't go into) for AR everywhere. Think on the order of 1.8 Billion images per month with depth data from the stereo cameras (30FPS * 10 sec snap * estimated 20 snaps per day * estimate 100k spectacles users in first month). Most people have no clue what is going on in the AR world, and I can tell you Snapchat is going to be formidable. If they can invest in a VRD, then they could win the whole AR market, but they need to raise more than 4BN to do that probably.
  • neosat 10y ago
    "Their Spectacles release has the potential to build the largest real world image dataset on the planet" With Google (and now Uber) cars driving around numerous places to capture data specifically for map imagery, satellite imagery and Android/iOS phones taking tons of photos + videos I highly doubt Snap will be the one to build the world's largest image dataset. The rest of your argument makes sense though.
    • AndrewKemendo 10y ago
      With only 100k users they would generate approximately 9BN images per month (30FPS min, 10sec Snaps, average 10 snaps per day). With 1M users of spectacles (.6% of their current MAU), that's potentially 90BN images per month and over a trillion per year. In the same dataset. Machine vision wet dream.
      • icelancer 10y ago
        There is no way the average user is shooting full 10s snaps 10x day. I use Snapchat regularly and that describes the top eschelon of users, which might be Spectacles users, but probably not all of them. I believe that is a vast overestimate.
• jsprogrammer 10y ago
  Have you seen their investor roll? Do you think they are sitting around looking for a 500m exit?
• mountaineer22 10y ago
  It gets more eyeball time than television.
• matchagaucho 10y ago
  The number of IPO shares floated and underwriter fees have more influence on the amount raised. It's not entirely driven by need.
• vit05 10y ago
  They will use that money to buy other startups. As they have done with the company that have created their glasses 2 years ago, the one that created lens etc.
• PartTimeZombie 10y ago
  The key line to me is: Morgan Stanley, Goldman Sachs are leading the offering They are the people who will the make the real money. They always do.
• qwrusz 10y ago
  You are right that $4B from an IPO is technically another fundraising round. However, an IPO is a special case, as for years now a company/its board will consider an IPO as a business strategy decision and not as fundraising per se. Big shift in the 1980s. There are some legal/regulatory aspects to an IPO and "liquidity event" type reasons an IPO is treated differently too. Basically, an IPO brings many pros and cons with it. A company may choose to IPO even when it doesn't need the cash or even want the cash. The money raised is just a byproduct of choosing this particular business strategy. (An analogy in pre-IPO startups: A startup may take an investment from a famous or influential VC even though the startup doesn't need the money at that point. Rather they look at it as a business decision because the startup really wants some other benefits they can get from having this famous VC as an investor. e.g. mentorship, network connections or even just more legitimacy by association... Lots of VCs provide non-cash benefits but you have to take cash to get them.) As for how did Snap Inc. get that $4B number. That's complicated and not even an official number. But a simple answer could be if a company's current private valuation is ~$40B and they want to IPO for strategic reasons but only sell off/dilute as little as possible while still looking respectable. They won't IPO only 1% of the company, too little, 10% is a respectable minimum. 10% of $40B = $4B. Total speculation and just an example. But hopefully you see you are right to ask questions when these companies IPO as it's full of smoke and mirrors with a different story behind the scenes.