8 ms·
Snapchat Raising a New Round at a $10B Valuation
- goronbjorn 12y agoThe stats from comscore show how heavily skewed toward the younger demographic Snapchat is: https://pbs.twimg.com/media/Bv3CIHgCYAEF0P0.jpg:large https://pbs.twimg.com/media/Bv3CIHgCYAEF0P0.jpg:large
- downandout 12y agoI just can't take seriously any VC valuing this company at $10 billion, and I'd be furious about this if I had money invested with any of the firms involved. According to Forbes[1] they have 100 million users. That seems high, but even if that's the case...since when is an app worth $100/user? Even Whatsapp didn't get that on a per-user basis. [1] http://www.forbes.com/sites/parmyolson/2014/08/26/report-snapchat-valued-at-10-billion-with-new-kleiner-investment/ http://www.forbes.com/sites/parmyolson/2014/08/26/report-sna...
- deleted 12y ago[deleted]
- rdl 12y agoPlus they probably have preference
- imjk 12y agoI think most people who invest in these things take future/potential growth into account. Also, it can be argued that consumer web investments have been working on the greater fool theory for the past decade: http://en.wikipedia.org/wiki/Greater_fool_theory http://en.wikipedia.org/wiki/Greater_fool_theory. This is still relatively early for comparable hyper-growth consumer web or mobile consumer app company. If you're able to get your money in this round, you're likely going to see a good return. Not saying I necessarily agree with the investment, but this is just how things have been lately.
- danielpal 12y agoRight, I know how you feel. This is how the Digital Sky Technologies LP's must feel about them investing in FB at 15B...good for you that you weren't part of that fund - they are definitely not serious VC's.
- downandout 12y agoAre you actually trying to imply that Snapchat is the next Facebook?
- danielpal 12y agoI am saying that valuing a company at a value $10B or $100B it's not outrageous in any way. You said you cannot take seriously any VC that values a company above $10B implying that no company can go above $10B or that they are somehow insane to think that could happen. This is simply no outrageous in any way and it was likely a very competed investment - I do think that Snapchat can achieve a value much larger than $10B or even $20B. Outrageous I would say is $1 trillion.
- downandout 12y ago>"You said you cannot take seriously any VC that values a company above $10B implying that no company can go above $10B or that they are somehow insane to think that could happen." I said nothing of the sort. I said that Snapchat is not worth $10 billion and likely never will be. For reference, my exact words were: "I just can't take seriously any VC valuing this company at $10 billion"
- prostoalex 12y agoThey don't. They invest with liquidation preferences and hidden dividends payable at liquidity. It's the press that assumes that preferred stock == common stock.
- hunt 12y agoWhat a huge valuation! I get that Snapchat has a huge amount of users, but can that really be turned into cash? Snapchat doesn't know much about users (personal interests, personal details etc) so I can't see advertisers being too interested with "targeted" advertising being so current.
- trhway 12y agocan they get to IPO at even higher valuation? can they get revenue to support that or even higher valuation? both - probably not, and it isn't really important as long as they can get a next, bigger, round of financing at even higher valuation. IPO of 2000 is the C-round of 201x - ie. the time to cash and let the next ones to hold the bug. And it is good as it shows that there is a lot of liquidity out there and it attracts the liquidity into hi-tech thus paying our salaries.
- canadaj 12y agoI have always wondered how the number of users turns into a dollar amount, especially when what you said is true about the lack of personal details. Maybe the valuation is based on the number of ransom-able pics in their database. :)
- eudox 12y agoThey may not little about their users now, but this valuation could well be based on the (reasonable) expectation that they will know more in the future.
- deleted 12y ago[deleted]
- nilkn 12y agoThis is the question that's asked every time Snapchat's valuation comes up, and as far as I know nobody has ever given a truly satisfactory answer that isn't extremely speculative.
- deleted 12y ago[deleted]
- 12y ago
- NhanH 12y agoFor context, $10B valuation would make Snapchat as valuable as AirBnB, Dropbox, Two Pinterest, (rumour) SpaceX. Do we know anything about the current growth of Snapchat? I thought the hype was over... turn out I'm probably wrong.
- Mandatum 12y agoThis is a cashout. They implemented their "new" features and can see that no revenue/profit is going to be made from their platform. There's an impending cliff they're about to drop off, shareholders are getting paid and jumping out before it buckles under it's own pressure. Anyone want to make a bet? I say within 6 months they'll be agreed to be acquired for cash/stocks. The only other option is to start acquiring other companies, but that's too risky long-term for investors.
- harryh 12y agoSure. I'll bet you $1,000 that they are still independent on February 26, 2015.
- danielpal 12y agoAdd me to that bet (I am betting that Snapchat stay's independent), so another $1,000. @Mandatum whats your email, let's put the money into a Bitcoin escrow, I'll set everything up, to be payed on February 27, 2015.
- rdl 12y agoYeah, this is a dumb bet. "Snapchat has peaked" or "snapchat is doomed" are each consistent with independence in a lot of cases. "Snapchat can IPO" as well as "undefined" are also. The only case I can see for "Snapchat in a quick sale" is if there were a strong #2 from FB, Twitter, Google, Microsoft and another of them bought Snapchat as the competitor. As it is, I don't think it's a direct competitor to Twitter/FB core business, so they're not forced to buy it right now.
- DigitalSea 12y agoIf what I've witnessed is any indication of a bigger picture, Snapchat's userbase is slowly shrinking. The appeal of expiring messages was once pretty great, but I can't honestly remember the last time I sent a Snapchat and I receive maybe a couple a week now. A few months ago it wouldn't be uncommon to receive between 6 to 12 Snapchats per day. Like all gimmicks, people grow tired and move onto the next big thing or not at all. There is only one application in the image sharing space that has remained dominant, growing quite linearly and strong and that is Instagram. Maybe it's just my friends that have stopped caring about Snapchat and it would be interesting to see if anyone else here has noticed similar behaviour of waning interest amongst friends and colleagues and the use of Snapchat. We all know unless Snapchat pivot the app and make it appealing again, it will only to continue to witness decline. Look to Foursquare for some great parallels, at its peak, everyone was using it at one stage and then people lost interest. The fact they had to open up yet another app got tiring and eventually people gave up. They're entering dangerous territory, it would be best for them to, tread lightly.
- error54 12y agoAgreed. I recently deleted my Snapchat account as the novelty of it had worn off and none of my friends really used it anymore.
- KrisAndrew 12y agoMy friends who used Snapchat have all moved on to Secret. Gossip always wins. No messaging app I've used yet does much better than group MMS.
- brackin 12y agoAre you fairly young? I'm 20 and using it more than ever, use it to communicate with most of my friends. Including the text functions.
- DigitalSea 12y agoI'm 26, so not sure if that is considered fairly young or "over the hill" haha. Maybe some subset of users are still using it quite regularly and my friends/family have all stopped because of some kind of chain reaction.
- kaleazy 12y agoKleiner Perkins buying .2% of Snapchat at a valuation higher than SpaceX, what's the point?
- wwwwwwwwww 12y agogeneral question: is there any way to find out what VCs/individuals end up buying into this round?