SnapChat has been valued at $4bn by keen investors, despite the popular self-destructing photo app not having an established revenue model. The California-based start-up has received the phenomenal price-tag after reportedly considering a plan to raise $200m in funding from investors in Asia. It’s thought that the newly planned round of funding for Snapchat will […]
SnapChat has been valued at $4bn by keen investors, despite the popular self-destructing photo app not having an established revenue model.
The California-based start-up has received the phenomenal price-tag after reportedly considering a plan to raise $200m in funding from investors in Asia.
It’s thought that the newly planned round of funding for Snapchat will include bids from international tech companies, including Tencent Holdings, a Chinese company valued at upwards of $100bn and responsible for popular messaging apps in its home country. Tencent is controlled by the 43-year-old entrepreneur Ma Huateng, whom Forbes magazine claims has a personal fortune of close to $7bn, making him China’s fourth-richest man.
Ad model
Snapchat has started running sponsored content on its service, with Lynx and MTV using the photo sharing app Snapchat in a new campaign.
Lynx tested the service in partnership with TMW, sending exclusive content about a secret Lynx launch party to fans via Snapchat.
MTV used Snapchat to promote its TV show Geordie Shore, sending out exclusive photographs and videos from its own ‘Geordie Shore’ Snapchat account directly to fans’ smartphones, giving them a sneak peak of the “cheekier side” of the sixth series.
Rise in popularity amongst teens
Investors are eager to take advantage of the app’s rocketing user base and popularity among the key under-30 demographic.
The app, which launched in July 2011 for iPhones and in October 2012 for Android, lets send pictures to friends pictures that can only be viewed for a set period of time.
The firm claims to have more than 100 million users exchanging around 350 million self-destructing snaps each day and a recent study from the Pew Research Centre reported that 9% of US smartphone owners use it, with this figure rising to 26% amongst the 18 to 29-year-olds.
This is comparable to another photo-sharing app launched almost a year before Snapchat – Instagram, which Pew claims is used by 18% of US smartphone owners and 43% of 18 to 29-year-olds. Its users exchange 55 million photos daily.
The Wall Street Journal reports that Facebook CEOMark Zuckerberg approached Snapchat’s chief executive Evan Spiegel with a proposal to buy Snapchat for more than $1bn but was rebuffed by the 23-year-old founder.
The app has attracted controversy, with almost half of Snapchat users having received nude or inappropriate photos, gaining an unwanted reputation of ‘sexting’ that has led to brands avoiding the app despite its high user numbers.
