Snapchat, as we all know is one of the most trending start-up which surprisingly is exactly similar to any other image/video sharing-app in the market, except for the fact that Snapchat has become the rage in the town.
It was started by Evan Spiegel & Bobby Murphy in the fraternity house of Stanford University in September 2011. And yes, Evan is the same person who was reported to be dating the ever beautiful – Taylor Swift for a brief period!
The Los Angeles-based image-sharing app has raised $648 Million so far and has ended the last year by silently bagging $848 Million funding from more than 23 different investors. Previously in 2013, Snapchat had rejected a total buyout offer from Facebook worth $3 Billion in cash.
Anyway all that is passé, let’s talk about the present scenario! Now that this less than four-year-old has got a revenue model in place with its new “Discover” feature, it has jumped onto raise its valuation to let’s say –$19 Billion.
Yeah..!!! Wondering how?
Well, Snapchat is in process to raise upto $500 Million collectively from E-commerce God of China – Alibaba and shockingly from the Saudi Arabian investor Prince Alwaleed Bin Talal owned Kingdom Holdings. With this round of fundraiser; Snapchat, aims to increase their value to $19 Billion.
As per confirmed reports; Alibaba is in conversation with the founders to invest somewhere close to $200 Million in Snapchat at a valuation of $15 billion.
Snapchat had also held discussions with Alibaba for investments last year, but due to unknown reasons that deal never saw the daylight.
But with the closure of this and any such US focused deals; Silicon Valley insiders consider them as Alibaba’s key strategy of becoming the world’s dominant e-retailer.
Now another interesting part of this deal is that; a billionaire Saudi Prince – Alwaleed Bin Talal, is also in talks with the founders to close a round anytime soon. It was also confirmed by Kingdom Holding organization that the prince had held a meeting with Evan Spiegel to discuss “future potential business cooperation.”
Image credit: fortune.com
This Saudi investor is the same person who earlier had invested in a range of U.S. tech firms including Twitter, AOL, Apple, Motorola & Fox and personally owns 95% of Kingdom Holding with an estimated wealth of $22.7 Billion – as per Forbes.
What makes this news even more interesting is that; this news of the prince holding talks with Evan comes right after he sold most of his shares in Rupert Murdoch’s – News Corp for £125 Million but he still owns 6.6% of Murdoch’s entertainment company, 21st Century Fox.
Now earlier it was being assumed and also reported that; this round of investment is a totally separate than Alibaba’s investment but in actuality it was a very smart and unique move played by Snapchat. It from day one was a part of a single round only!
So traditionally, the fund raising procedure goes like this; a person or a firm goes out to raise a round for a definite amount, wherein their job is to get investors interested, after which all of them are brought on the same page based on an agreed valuation and then you close it.
But unlike otherwise; Evan is going after individual investors at different valuations. It’s like a rolling investment and a rolling close, and in theory he has already closed 40 rounds figuratively.”
And going by these calculations; Snapchat has already raised nearly $500 Million in the last six months, which has gone unreported.
Quite frankly, although the company has always been notorious and famous for “Not Sharing” its future plans but looking at the strategy used by Snapchat, it clearly points out, how big hopes Snapchat and its investors have for the app.
Now, what makes the app such a hip, that even a honcho like Facebook feels threatened is a fact that; Snapchat’s primary target audience is the age group of 13-24 year olds. Basically, teens who want anything which is cool! And just when Facebook lost that demographic, Snapchat was the very next “Cool” bandwagon all of them jumped on!
And their stats speak the same too! The start-up image-sharing app which earlier had ‘100 Million users’ in August 2014, is now closing to around 200 Million users, and to add to that – they had 700 Million photos & 500 Million Snapchat Stories sent per day on the app.
And looking at it from the other way around; the way Snapchat is dealing with its fundraisers, can also turn out to be the “much desired” change in the way things have been working so far!
The app has recently added some more features, apart from its traditional basic features wherein one can share images, videos to individuals, group of people or as a story to everyone on their list; Some of these include: –
- “Discover” – A new page has been created on Snapchat itself, where users can view multimedia clips from a variety of different media properties, including ESPN, CNN, Yahoo News, National Geographic and Cosmopolitan. To access this part, all you got to do is – Swipe ‘left’ twice and you will reach where earlier you saw the list of friends but now it says “Discover,” with 12 different logos, just tap on one to see the videos or articles.
- Also, now the “Add Friends/Added Me” section is within the camera function itself via the tiny Snapchat ghost in the upper portion of the screen.
- But beyond all that; the “Snapchat logo” that appeared here has actually become a scannable & personally identifiable code for your account, and can be used to add friends, just like how we do it using the QR Code. And the icing on the cake is that, you can also add the image of this logo on other online accounts like Instagram as well and anyone who scans it will be able to follow you.