SNAPCHAT RAISE IN VALUATION PAVES WAY FOR POSSIBLE IPO

snapchat-logo-on-phone

Snapchat, one of the fastest growing messaging and social media platforms in terms of user base, expressed plans of going public later this year or early in 2017. In a Recode conference, May 2015, Evan Spiegel expressed this. “We need to IPO…. We plan to do this,” the Snapchat CEO and Co-founder said.

Snapchat is a VC-backed tech startup that started only as a class project by Evan Spiegel (current CEO), Reggie Brown, and Bobby Murphy—all former students of Stanford University. It was officially launched in 2012.

What separates it from its messaging and social media app counterparts is its “ephemereal” nature. The application permits its users to take photos, record videos, and add texts and drawings. It’s like your next-door Messenger only that the photos and videos disappear within seconds after the recipient views them. The length of time of the message’s appearance depends on what was set by the sender. It is mostly popular among 13-24 year-olds, the highly targeted demographic market by most tech startups.

This “self-destruct” feature is the main contributing factor to its high user base—with 100 million active users daily. This high volume of traffic attracts many advertisers which Snapchat strategically uses to their advantage. The tech unicorn charges a whopping $750,000 minimum for a day of advertising. This is a direct contrast to the traditional per click payment when advertising online. This proves to be a good strategy though, since with its advertising products being revved up comes the pump to its revenue numbers.

It is expected that in 2017 Snapchat will near $1 billion in advertising revenues. The same amount of revenue is predicted to double in 2018.

Also, the popular messaging app was able to raise $1.8B in an extension to its Series F funding round which further hiked its valuation from $16B earlier this year, to $18B.

This promising boost in revenue and the increase in valuation stress strong investor interest in the company despite freeze in IPO market.

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Author: exocapitalfinancepro

As the dissemination of online financial news gets easier through the evolution of different media platforms, Exo Capital Finance Pro brings the most comprehensive up-to-date financial information right in front of your eyes. In line with the mission of Exo Capital Market, this news blog aims to provide the financial ideas needed by the clients through the market news and analysis delivered regularly. Exo Capital Mission Grounded on financial stability and service efficiency, Exo Capital Markets Ltd. hopes to stimulate and drive innovation in the world by catering the needs of its clients. Committed to guiding its clients to achieve their maximum potentials, the company seeks to lead and bring growth into the market through the high quality services it provides. Exo Capital Vision Exo Capital Markets Ltd. strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry. The company wants to create an avenue of knowledgeable and competent traders by assuring accountability and honesty in delivering the services we provide for the community.

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