Snapchat had just completed a round of financing several months ago, with a valuation reaching $800 million. Now, they plan to undergo another round of financing, and the company's valuation will reach between $3 billion to $4 billion. The investor is very likely to be Tencent from China.
In September 2013, Snapchat announced the latest data, stating that the spread of "disappearing messages" on the platform was growing rapidly, increasing from 200 million per day in June to 350 million by September. Moreover, most users are young people such as high school students, with extremely high application activity. CEO Evan Spiegel expressed hopes for a new round of financing at an industry conference, and even mentioned the possibility of commercialization at that time.
This move drew attention from many investors, including Mark Zuckerberg, who led a team to create (replicate) the Poke app in 12 days a year earlier. According to the Wall Street Journal, Zuckerberg offered more than $1 billion to directly acquire Snapchat, a price higher than when he acquired Instagram.
In response, Evan Spiegel's reply was: no interest in selling to a "social networking site."
The "disappearing message" app Snapchat, founded in 2011, became wildly popular due to its innovative model where images/videos disappear after being viewed, satisfying the performance and expression desires of many teenagers, resulting in extremely high user activity. In December 2012, with tens of millions of users, Snapchat's daily photo sharing reached 50 million, while Facebook, with 1 billion users, had a daily photo sharing count of only over 300 million at that time. This explains why Zuckerberg was so eager that he immediately launched Poke, and even planned to directly acquire Snapchat.
Among many potential investors, Tencent is the most competitive. Not long ago, Tencent invested in the flash sale design product e-commerce Fab, bringing its valuation to $1 billion. According to the Wall Street Journal, Spiegel has been frequently communicating with Tencent recently, suspectedly discussing financing matters.
Snapchat's "disappearing message" model has already been considered one of the internet's hotspots. However, since the majority of its users are teenagers with lower purchasing power, the company has yet to make a profit. Spiegel is also eager to raise funds for monetization. After the last round of financing, they have also been exploring ways to make profits, currently through in-app purchases and embedded advertisements. In October 2013, they also launched a similar app called Stories, a "24-hour disappearing story" app.
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