Snapchat aims for $19bn valuation

In its latest round of venture capital funding Snapchat seeks $500m, potentially raising the value of the popular mobile app to $19bn

Snapchat CEO Evan Spiegal has made a series of decisions that have boosted his company's power and reach spectacularly. In its next round of venture, Snapchat is seeking $500m

Snapchat’s potential $19bn appraisal will make it the third most valuable tech start-up in the world, following in the colossal footsteps of smartphone manufacturer, Xiaomi, and cab hailing app, Uber. “We believe that messaging apps are revolutionising the tech industry and these platforms are becoming ecosystems in themselves – and Snapchat is definitely on its way to be one among those,” says Tarun Pathak, Senior Telecoms Analyst at Counterpoint Research.

The smartphone app, which was launched in 2011, allows users to upload pictures and videos that can only be seen by recipients for a matter of seconds. The majority of Snapchat’s audience is a younger crowd, with great appeal among tech-savvy teenagers. This consumer base has begun to broaden, with a reported figure of over 100 million users per month.

Snapchat’s potential $19bn appraisal will make it the third most valuable tech start-up in the world

Snapchat has started tuning into this powerful reach by posting adverts, which in line with its content, can only be viewed for a short burst if clicked on. Unlike other social media platforms, the firm has maintained that it will not use demographic information for target advertising.

In January, Snapchat launched Discover, a section which offers original content on a daily basis from a wide range of influential media outlets, such as National Geographic, CNN, Yahoo News, Cosmopolitan and EPSN; a clever strategy to further the app’s appeal while also bringing in advertising revenue.

“The trend of recent announcements shows the potential of Snapchat in expanding its reach across multiple areas and being a horizontal platform for a wide range of communications that will keep up its growth momentum and challenge the likes of Wechat and Whatsapp,” Pathak tells The New Economy.

Similar to the story of Facebook founder, Mark Zuckerberg, Snapchat was created by CEO Evan Spiegel, 24, while studying at an Ivy League university. Spiegel also left before graduation in order to focus on his entrepreneurial ambitions. The tales of the two tech billionaires were to become more closely aligned when Zuckerberg offered $3bn for Snapchat in 2013. Spiegel declined the offer, after which he successfully obtained funding from 23 investors and valued the company at $10bn in 2014.

Spiegel’s instincts of the growing value of Snapchat appear to be on the money, as evidenced by the firm’s continuing rapid growth and the app’s recent modifications. With numerous new markets to reach, the potential for further expansion looms for the young start-up.

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