Video messaging application Snapchat looks to have made the right decision turning down Facebook’s attempt to acquire them for $US3 billion in 2013, with reports coming through that the company is now being valued at $US16 billion ($AU20.9 billion).
Bloomberg is reporting that Snapchat’s value has jumped after they earned $US537.6 million thanks to the sale of common stock. Furthermore, a Securities and Exchange Commission filing has found a Snapchat funding round could be bringing the company up to $US650 million. If confirmed, Crunchbase estimates the company’s latest financing surge may come in at over $US1.4 billion.
The funds are said to be coming from a different path than usual, targeting common stock being a rare move in later-stage deals.
“Investing in common stock, especially at a $16 billion valuation, is not normal,” Bloomberg quotes Anand Sanwal, Chief Executive Officer of venture-capital data firm CB Insights, as saying.
“It highlights the leverage that Snapchat had in these negotiations because the investors aren’t getting the protections they normally ask for.”
Snapchat has become yet another quickly-established tech success story, crafted in 2011 by Evan Spiegel, Bobby Murphy, and Reggie Brown, who were Stanford University students during the technology’s early stages.