
Snapchat raised $1.8B in a Series F round - zhuxuefeng1994
http://techcrunch.com/2016/05/26/snapchat-series-f/
======
argonaut
People need to stop focusing their criticism on how stupid the app is or how
they're going to lose all their users. It's almost a meme by now of how people
say this every time Snapchat is brought up. By now it's a foregone conclusion,
and requires active ignorance and not really caring to keep an open mind, to
continue to hold onto that belief in the face of tremendous evidence that 1)
Snapchat is very popular, 2) Snapchat has been around for 5 years now and
hasn't gone anywhere, and 3) Users of Snapchat use it very actively.

Personally, I think one good way to see why people use the product is to 1) be
in a relationship, and 2) regularly send pictures of what you're doing / funny
things you've encountered / your face, back and forth with your partner.

Where I feel like there is legitimate criticism of Snapchat is their _ability
to monetize_. Unlike Google, there is no purchasing intent. Unlike Twitter or
Facebook, there is little ability to target users beyond age/gender/location
(and no amount of computer vision in the short term will change that). Their
Discover / Live products (which allow you to see snippets from brands / news
channels / publishers) are promising but unlike the core product, I think
there is legitimate reason to be doubtful about the appeal of these products
because they have nothing to do with chatting with friends.

~~~
vonklaus
look, I am all for giving snapchat the benefit of the doubt (or I did a long
time ago) it was actully the classic zuckerberg boardroom story peter theil
tells all the time, except zuckerberg was yahoo to snapchat(i think yahoo was
the aquirer but IDRP). Mark Zuckerberg was a the full package, a super
talented developer and shrewd business man. Maybe he was cocky, maybe he was
super clever, but he doubled down on himself because he knew his business, he
knew his customers, he knew the product, and he mapped out the next 2-5 years
in his head already.

Snapchat turning him down was an echo of that enthusiasm and market knowledge.
Quiet determinsim & with only that to go on, the market assumed it was a
zuckerberg story: knowing much more than everyone else and being able to see
the companies future.

That was bold, and that took guts to do what snapchat did, and turn down
money. However, facebook grew up in a totally different time. After 7 years
facebook raised slightly less than this capital raise and it was just
fundamentally a better/different company. But chiefly, Facebook's value
materialized after this as Mark expected it to. By value, I mean on many
levels. Snapchat's has not. The product hasn't evolved (again I don't use it,
but apparently) very much. Facebook, adn the team stormed pictures, mobile,
developer centric apis (becoming a core authentication cornerestone and
identity tool), streamlining feed data, and matching algorithims. Snapchat, to
a non-user, appears to fall flat in positive significant improvements. There
seems to be one feature I have read about that is relatively new, that is
universally hated. It is the only thing I have read about that seems like a
departure from text messages I can never see again.

First off, advertising revenue was super important and a semi-reasonable
monetization strategy back then. Facebook had officially won the network
effect social game. It was the beneficiary of the largest social network to
exist, ever. Also, their content was aggregated and stored and has been for a
decade. They have massive amounts of user data and a distribution network. You
really can't replicate 5 years of content in a single place and a network that
is ~1/10th the size of earth. Facebook is google for people, it is a search
engine.

Snapchat does not have a clear monetization strategy and the content they have
is ephemeral. If a snapchat clone came out tomorrow, snapchat wouldn't be as
sticky. Snapchat looks like twitter, the poster child for massive high
engagement with disposable content and horrible biz fundamentals. In fact,
twitter or facebook could clone snapchat probably super easy and enjoy crazy
leverage and synergy. The only reason a 3rd unknown party can't is network
penetration.

The thing about twitter, is that it is a realtime sentiment protocol that
allows data-mining by forcing humans to condense thoughts into a single data
object called a tweet. Creating your own data transmission protocol and having
end-to-end control of it has huge potential. They can distribute their api &
data objects to news, politicians, entertainers, hedgefunds and also allow
advertising and purchase execution.

Uniting this data object with something like a hashtag allows them to track
global trends. Where as Snapchat allows you to send dickpicks to horny girls
you want to sleep with. So I am all for people trying to procreate and I have
even had sex once or twice myself, but snapchat has a worse monetization
strategy than twitter, and they really would need a facebook size IPO to pay
back investors.

FB raised 16B in a horribly botched IPO. That would 10x the last money in,
which has probably horrifying ratchets and clawback clauses. So, an admittedly
super popular app that has existed for 5 years doesn't justify a 16B ipo at
100+B in 2 years like facebook did unless they think they can charge like $1
like whatsapp did, but that proved to be shitty for them. Was that acq. worth
it? IDK, but certainly no PE firm would do it, only a huge company based 100%
on realtie social connectedness.

I don't want to hate too hard, snapchat is cool (i don't use it myself) and
many people find it a staple of their day. Especially trnedy demographics like
postlennials. However, if my generation (millenials) is any indication, these
kids are going to have way less money, be much less willing to pay, and came
out of the womb with adblock, ublock and a propensity to jump around numerous
social networks.

edit: fossuser pointed out, which I had forgotten/totally missed, that post
facebook/snapchat deal facebook did clone snapchat with poke in a 2 week
sprint and spent the next 1.5 years hacking on it. It did fail, and they
shunted the project. Here is the IBM advert fossuser was speaking about and
the Evan Spiegal quote[0]

[0][http://techcrunch.com/2012/12/21/snapchat-co-founder-evan-
sp...](http://techcrunch.com/2012/12/21/snapchat-co-founder-evan-spiegel-
responds-to-poke-welcome-facebook-seriously/)

~~~
adotjdotr
"Snapchat does not have a clear monetization strategy and the content they
have is ephemeral. If a snapchat clone came out tomorrow, snapchat wouldn't be
as sticky. Snapchat looks like twitter, the poster child for massive high
engagement with disposable content and horrible biz fundamentals. In fact,
twitter or facebook could clone snapchat probably super easy and enjoy crazy
leverage and synergy. The only reason a 3rd unknown party can't is network
penetration."

This is fundamentally wrong. I'm an advertiser and I have seen so many
Snapchat campaigns work tremendously well for brand advertisers. All for large
established brands who are spending solid amounts with the platform.

Much of the hard work is ahead for the platform in terms of measurement and
clear steps to defining and achieving ROI metrics such as awareness, brand
uplift all the way through to DR elements such as traffic, leads, mobile
installs and conversions.

The company makes huge strides very often updating media packs, incorporating
measurement (Nielsen) etc. I expect very smart acquisitions in terms of
continuing to drive user growth on the consumer side and build out of
measurement / ads API to cater to the agency world in the next 12-18 months.

An IPO for snapchat is some time away but it is building a very real
commercial organisation amongst brands, advertisers, agencies, the TV
community (look at the viacom deal recently).

Also to your point here:

"FB raised 16B in a horribly botched IPO."

You can't say a company raised $16bn and had a horrible IPO. This really
doesn't make any sense irrespective of all the ratchets and clawback clauses
(none of which will keep any FB exec up at night let alone the CEO). Look at
FB today, you should be kicking yourself if you had the chance or even thought
about buying the stock at $17 when it was being shorted like crazy by Wall
Street.

~~~
vonklaus
i agree, you make some compelling points. i would be interested to know more
about how big a market the adv/data piece is and how yoh use it. i was wrong
when i said they don't have a clear moneyization strategy. I should restate
what i think now: _it is still not clear to me what strategy would support the
growth required from an investment of this magnitude demands_

however, like pg said about whatsapp acq, it was like taking the atomic mass
of company. who are you going yo believe, mark zuckerberg, the guy who is
betting hos company amd his own money and furure on it after extensive talks,
internal fb ops kniwl, and access to WA books, or TC pundits. (clearly my
summary, not direct wuote. was video interview, tough to find source)

i do believe still, to disagree somewhat, that fb ipo was botched. point i was
making is that facebook was a very strong company (at least rel to SC) and the
IPO was indervalued because of scandal and technical errors. even undervalued,
a comparative IPO for snapchat would still require a huge increase in real
revenue and numbers.

it is a steep climb, if we say FB was $100B and dont adjust for the
interference of several problems (glitch, scandal, info leak) snapchat would
have to justify real profitability and massive rev growth. maybe they have
that, but (advanced apologies for no citation) facebooks revenue indicated by
their s-1 filing was 3.7 billion with 0.845B users.

This is a real question not rhetoric: Do you think snapchat can achieve these
numbers given 3 years?

~~~
adotjdotr
I believe Snapchat will not grow in three years to be a one billion user
company (I'm happy to be proven wrong here though). I do believe that once the
ad product matures in terms of ad formats, measurement, ROI across both brand
and DR metrics there will be some strong revenue figures all at the typical
70-80% gross margin you would expect from a software business. So from a
revenue POV I expect it to ramp significantly and faster than we would expect.
They have raised enough money to build or buy the tech needed for a biddable
solution, measurement capabilities and a platform of true scale. I would not
surprised if they add a third party solution a la Video on Demand for Snapchat
ads to be served onto to increase scale of the platform off the core Snapchat
platform to drive more revenue via advertising. Lets also not discount things
like stickers etc which have been extremely profitable for companies in the
Far East like WeChat.

I do expect the revenue to ramp significantly for FB, TWTR, IG, Snapchat etc
over the next 3-5 years based on client demand. In five years time, all the
strongest aspects and best practices will really be established by brands and
agencies and the ad dollars will subsequently follow. Much of the overall
digital budget is moving quickly downstream to social platforms. This pace
will quicken over time as all brands will need to spend on these platforms to
fulfill reach capabilities. All big brands need to be able to reach millions
of users at scale which comes with significant media investment or revenue for
these social platforms. We're only four years in and it will be an area I am
betting the next 5-7 years of my career on.

------
gjolund
The only real value of Snapchat is that now I dont have to scroll past the
innane content snapchat is used for on other social networks.

Im not going to say snapchat is or isnt worth $20b. I am going to say that I
am sad that so much energy and money is being thrown at such a trivial
application.

Im a software engineer, and i like solving real problems. I cant imagine
working at snapchat and trying to motivate myself to be excited about its
useless app.

~~~
ramenmeal
What about snapchat is useless? Or is this just typical "damn kids these days"
speak? The app is an incredible form of communication, and there is a reason
people prefer it to other mediums.

~~~
gjolund
What exactly are people communicating?

If snapchat shutdown tomorrow would anyone actually care, or would they
immediately shift to the next best platform?

Compared to say a public utility, car manufacturer, global shipping company,
etc.

There are real problems in the world, and snapchat doesn't solve any of them.
There are real companies trying to solve these problems, and snapchat is worth
more than most of them.

Our obsession with "incredible forms of communication" is in reality just a VC
fueled gold rush capitalizing on the current flavor of the week.

~~~
qq66
> If snapchat shutdown tomorrow would anyone actually care, or would they
> immediately shift to the next best platform?

You can say this about a lot of great companies. Toyota shuts down tomorrow, I
buy a Honda instead. Sure, I wanted the Toyota, but I'm not going to lose any
sleep over it. UPS shuts down tomorrow, I use FedEx. Apple shuts down, I use
Android. Starbucks shuts down, I go to Peet's.

~~~
gjolund
Those companies employ hundreds of thousands of people and entire supply
chains.

Snapchat employ's next to no one in comparison and is worth more than entire
industries.

~~~
canttestthis
You're good at moving the goalposts in a debate.

~~~
gjolund
If you have something to contribute I would like to hear it.

------
macandcheese
Snapchat is the medium that most closely represents a real life conversation -
between individuals, between friend groups, between performers & fans, etc.
That's why it's popular and will continue to be so.

The beauty of Snapchat is that you don't need to think about what you are
posting: It's ephemeral, it's kept close to the vest (you choose explicitly
who sees it), and above all, it's without reservation. I don't consider the
appropriateness of my content because I choose exactly who receives it, just
like how in real life you probably speak differently around your friends than
you do your co-workers, or your family, without really thinking about it.

Snapchat provides a medium for users to share content without the baggage of
social validation that other networks like Twitter and Facebook are beholden
to (intentionally and unintentionally). Nobody can see how popular your
content is but yourself, and you control the reach down to the individual. No
other content network is like this.

Plus, you can draw bunny ears on people.

~~~
gjolund
"The beauty of Snapchat is that you don't need to think about what you are
posting"

Exactly why it holds no value at all for me.

~~~
dwaltrip
What the poster meant with that statement is that you don't need _worry_ or
_obsess_ about the long term reaction of all your hundreds or thousands of
followers/friends/acquaintances and what they will think the way you do with
something like Facebook (really any other network). In my opinion, this is a
major problem with those sites. You automatically and subconsciously become
your own personal "brand manager" and "self-marketing team", and are subjected
the output of everyone else on the network who is doing the same thing. It's
greatly magnified version of the old "you only see everyone else's highlight
reel" dynamic. A lot of studies are coming out with interesting results on
this and related issues.

On Snapchat, the communications are all shortly lost to the sands of time,
like most real-world interactions. This has a big effect on how people orient
themselves with the app.

I'm not saying it is or isn't worth $XX billion, but it's not something to
disregard without any thought.

------
cassieramen
How are snapchat employees making out here? It seems like share dilution and
even more investors getting exit preference has got to be eroding value like
crazy.

Perhaps someone with some experience can shed some light here, if you joined
snapchat 2 or 3 years ago are you seeing all of your supposed value
evaporating away?

~~~
imaginenore
You're forgetting that the valuation of the company has been growing
exponentially

[https://media.licdn.com/mpr/mpr/shrinknp_800_800/AAEAAQAAAAA...](https://media.licdn.com/mpr/mpr/shrinknp_800_800/AAEAAQAAAAAAAAibAAAAJDA0MmU1YzZjLTE5MDctNDFlYS1iNDkxLTE0Yjg2OTZkMTE5Zg.png)

With this latest round it exceeds $20 billion.

~~~
cassieramen
This is part of what I'm asking. The valuation is growing, as is the amount of
money their taking. That means the company now has to exit for that much more
in order for employees to see any return. If I'm an early employee I now have
to hope they exit for $X billion for my shares to be worth anything. If they
exit for less there's a chance I see nothing after investing years of my life
and watching them pass on a $3 billion offer.

I hope that's not the case.

~~~
downandout
My guess is that with such a massive round, at least some employees were
allowed to take some money off the table at this valuation. I'm not sure what
their policy is on secondary markets, but employees may be cashing in at the
current valuation there as well. If that is the case, those that joined near
the time of the $3 billion offer are likely very happy.

------
wtvanhest
Every single person here seems negative about Snapchat.

I am 30+, use it occasionally, and see more and more of my older friends
signing up. Especially those friends far away from the echo chamber. This
fundraising feels smart for investors who want a great return and for the
company to use to get to an IPO.

If you don't use Snapchat, or haven't used it in a few years, it is probably
time you take a second look.

~~~
sotojuan
People on tech forums are typically negative about social media apps and
platforms. It's pretty interesting.

~~~
gjolund
I can only speak for myself here.

I have no problem with snapchat the app. I think it is dumb, and don't enjoy
using it, but that doesn't mean that it shouldn't exist.

What I do have a problem with is Snapchat being put on a pedestal, and
perpetuating the SV cash grab business model. Get a bunch of users with a
trendy app, data mine the shit out of them, and serve them ads until the app
folds. There is no lasting value, and it is just the kind of rampant
speculation that collapsed our industry in the past.

~~~
jamiequint
Yeah, that cash grab model sure didn't work out for Facebook, Twitch, YouTube,
Instagram, etc. Good thing those finally failed due to the complete lack of
value being provided and their associated pesky ad-based business models /s.

~~~
gjolund
I noticed you left Twitter out, which is odd because it is the app that most
closely resembles snapchat.

FB acquired Instagram for its user base. Amazon acquired Twitch for its user
base. Google acquired Youtube for its user base.

How many snapchat users do you think also use those apps? How much additional
value is being extracted from them via snapchat?

~~~
jamiequint
Your question isn't clear. Attention is value, why does it matter what other
apps they also use?

------
mikeryan
There's been a bunch of apps out there that have taken off and completely
surprised me. But I can't think of another succes that makes me feel out of
touch more than a 20B valuation for what launched as "the app that sends
disappearing images". Kudos to the team though. Evan and Co, seem to have made
a lot of very smart decisions in growing this business.

~~~
iliaznk
It's been much more than only disappearing images for a while.

~~~
arsalanb
Yea. Slap on a pair of dog ears and a filter. And then disappear.

~~~
milesokeefe
Between stories, geo filters, face filters, discover, chat, video chat,
trophies, streaks, etc. it's become a bit more than just disappearing images.

------
CameronBanga
I know that I don't "get" venture capital, but is Snapchat even profitable (or
close to) yet? If not, and it's going to take nearly 2 billion more to get
there, do they really have a product that will ultimately return value?

It's the cynic in me, but by a series F, and needing 2 billion, this feels
like the sort of funding where early investors are propping the valuation of
Snapchat in order to sell off to someone like Yahoo for a crazy amount of
money, where the product will go and eventually die. All in the name of
advertising. I guess I just don't get it.

~~~
underyx
>needing 2 billion

They probably don't _need_ 2 billion but can grow faster by making use of this
money instead of going for some aggressive monetization. I don't get why
everyone acts like Snapchat is unable to monetize the platform — they just
don't want to if they don't need to yet.

~~~
edgyswingset
> I don't get why everyone acts like Snapchat is unable to monetize the
> platform — they just don't want to if they don't need to yet.

I'm not convinced that's true. Reportedly, in 2014 they made 3.1 million in
revenue and -128 million in net income [0]. I don't think a difference that's
two orders of magnitude is a function of "not wanting" to monetize the
platform. I'm convinced they're a <100 million/yr in profit product.

[0]: [http://gawker.com/snapchat-lost-a-ton-of-money-last-
year-170...](http://gawker.com/snapchat-lost-a-ton-of-money-last-
year-1706957414)

~~~
runako
From TFA:

"the company has estimated that revenues will be between $250 million and $350
million for 2016, and between $500 million and as much as $1 billion for
2017."

Incorporating your numbers, what I see is a business that is plausibly on a
path to grow from $3m to $1b in revenue (~30,000% growth) in 3 years.

If you an investor targeting growth companies and you pass on an opportunity
like this, you should be fired. Snapchat isn't General Mills, and it should
not be valued using the same approach.

~~~
edgyswingset
That's good for them that they can pitch that to investors! But what are their
_actual_ numbers?

~~~
runako
1) Investors in growth companies care about what's next, not what's past. The
past numbers are important to lend credibility to projections, but nobody
values growth companies based on (presumably much smaller) numbers from the
past.

2) Also from TFA: "Snapchat’s revenues in 2015 were $59 million (recall that
there was no real monetization effort in the first part of the year, and only
the beginnings of it in the latter part of the year)."

I'm not privy to any internals at Snapchat, but based on the other metrics in
the article, the projections are not implausible at all. But yeah, it's still
not appropriate for people whose idea of risk is owning Procter & Gamble.

------
heavenlyhash
1.8B.

1,800 Million, right? Stop me when the math goes wrong.

Divided into bundles of 200k: 9000x.

Let's say each member of a team costs 200k/yr. High for some, low for others,
whatever.

1.8B dollars is enough money for a team of OVER NINE THOUSAND people.

What... exactly is taking that much effort, here? What is this money fueling?
I honestly boggle to imagine.

~~~
dboshardy
That math holds if they are planning to only spend money on hiring those
people for 1 year only.

More realistically, the money is probably for tech overhead. Server space,
software licensing, money for keeping all their servers working for a while
(support, replacement servers/drives) etc.

~~~
MichaelGG
Not being adversarial: What kind of software licensing is Snapchat paying? Dev
tools, ok. Some BI/reporting stuff? I'd imagine everything else would be open
source, right?

~~~
askafriend
They run fully on Google App Engine and obviously they have to store all of
that heavy video data somewhere so bandwidth costs will be crazy.

So a combination of them not having their own infra like FB does, and just the
nature of the data they are responsible for is very heavy.

------
vgt
Shameless Google Cloud plug:

Snapchat runs entirely on Google Cloud Platform, and have famously declared
that they have 0 Ops people because everything they use is fully-managed and
no-ops. This is one of the reasons they are able to deliver features at such a
rapid pace - they aren't worried about scale or reliability the way anyone at
the scale is on-premise or on AWS/Azure.

~~~
toomuchtodo
I find it somewhat humorous that the examples GCP reps hold up as use cases
are grossly unprofitable startups (Snapchat, Spotify).

~~~
cm3
What are you implying?

~~~
toomuchtodo
Exactly what you imply in your sibling post to mine.

~~~
cm3
Hah, okay.

------
nooron
I think Snapchat will own media curation for wearables/AR displays in a few
years. They can be the Comcast of your face– you'll be able to flip through a
number of channels, from "X NAME OF HOLIDAY" to "THING HAPPENING IN CITY" to
Vice to National Geographic. I think their goal is to serve as a demand-
generation tool, like TV used to be.

------
bqe
Can someone who uses Snapchat routinely tell me why you use it routinely?

I've been using it for a few weeks to send a picture or two to the few people
I know who use it, but it seems pretty limited. I follow a few "famous" people
on it, and they basically just post random images of them walking around NYC
or them traveling. I don't yet see the benefit.

~~~
eightysix_four
I deal with the three "major" networks like so:

Facebook - Accomplishments/events I want shared out to a broad network. Highly
"filtered" view of my life (and my friend's lives).

Twitter - Less content but less filter, more off the cuff thoughts or
broadcasting something I find interesting to a broad network of followers.

Snapchat - High content, no filter. Snapchat photos can be "bad", things in
them can be mildly inappropriate, and the broadcast distance is relatively
small.

If you don't personally see the value of a low/no filter network with your
friends, then it probably isn't for you.

~~~
bqe
This explanation makes the most sense to me. I've moved away from friends in
the past few years, and we use a combination of methods to keep in touch, but
however you do it, it seems like they just get farther away because some
things just aren't worth an email or a Facebook message.

Snapchat (if they used it) would be a good way to stay casually in touch with
them.

------
ljk
For people who read the "How Technology Hijacks People’s Minds" article,
[https://news.ycombinator.com/item?id=11737232](https://news.ycombinator.com/item?id=11737232),
does snapchat implement any of the "traps" the article mentions?

~~~
licnep
I think a few of them, although most social apps are bound to have these kinds
of features:

hijack#2 (slot machine): you get a notification when you receive a snap but
you don't know what it is until you open it

hijack#3 (Fear Of Missing Something Important): snapchat stories disappear
after 24hr, so if you don't wanna miss content from your friends you must make
sure to log in at least once a day

hijack#4 (Social Approval): when you post a story you can see how many people
viewed it

hijack#5 (Social Reciprocity): when someone sends a snap to you personally and
not to their story you feel compelled to send something back

------
connoredel
I wonder if there was any secondary equity sold. Spiegel famously took out
$10M back in 2013 and bought a Ferrari. As an investor/BOD member, I think you
need to balance between giving founders a taste of something so they don't
sell at the first offer or push to IPO too early and potentially giving
someone generational wealth when there is still so much work to do.

Remember Secret? Founders got $3M while investors with preferred stock even
couldn't recoup their loss.

I can't help but think employees with common stock are always the losers here.
Founders' "common stock" is really given preferential treatment -- it's
obviously more liquid. Your average employee didn't get to sell his shares
directly to some poor VC before the company went under.

------
rm_-rf_slash
Nobody wants to be the last person to invest in Snapchat.

------
georgiecasey
forget the valutation, what can a social media app possibly spend nearly $2B
on? not like it's uber where they need money to enter new markets. maybe
google appspot bumped up the bills lol

only logical thing is founders taking a load of money off the table

------
fitzwatermellow
Currently developing tools to do market research and user analytics on
Instagram. Experience so far with the Instagram API is quite positive. Take a
look at the endpoints on their dev page and its immediately evident: Instagram
exposes a lot of precious data. Consequently, it is the platform of choice for
users who accept sponsorship for posts. Also, when reaching out to the
Instagram team about improving tag discovery and search, they were very
amenable :)

If anyone from Snapchat is monitoring this convo, I would implore you guys to
prioritize your API rollout. Provide the tools that allow your users to be
able to make data driven decisions. Building an ecosystem of creators who can
figure out how to monetize their Stories better than any one else can is "the
key"

------
slackstation
Snapchat and the like are low hanging fruit. Someone should start a DAO where
users can either see ads or pay a small annual fee to pay for the service and
also invest in their own security and sanity.

There are programmers who are interested, there is a public that could be
convinced. All we need really is to solve the human problem or aligning money
with incentives.

There should be a high quality social network where you use personal filters
rather than relying on central intelligence to do the heavy lifting.

Rather than be beholden to people who are willing to invest billions in a free
product so that they can traffic ads and/or data mine.

------
xhrpost
I've been denying the "bubble" hype for a few years now, but seeing numbers
like this makes me start to wonder. However, perhaps this is not the effect of
a bubble, but simply the effect of companies looking more to raise IPO level
money from the private VC sector. [http://www.vox.com/2014/6/26/5837638/the-
ipo-is-dying-marc-a...](http://www.vox.com/2014/6/26/5837638/the-ipo-is-dying-
marc-andreessen-explains-why)

------
aznpwnzor
I completely agree with the implied valuation, but had slight pause as to what
this money could be used for.

I think Snapchat has had mild success with monetizing Discover and Stories.
However, I think correct course of action is moving from a incentivizing
content distribution role to incentivizing content creation role. For example
creating partnerships. What you have right now are middling ready to explode
and fame driven celebrities like YouTube had before partnership incentives.
Snapchat is exactly there in their timeline.

------
the_watcher
I've been impressed with Snapchat, and generally think they are moving in the
right the direction. That said, can someone please explain what they are
spending all this money on? They've raised over $2.5B. That's simply an
astounding amount of money.

------
cpach
Wow. I had no idea investment rounds were in the size of billions these days.
Perhaps not so surprising though that investors wants larger yields than what
the public stock markets can offer.

------
kevando
When you look up hive mind in the dictionary, you will find this thread.

------
sarreph
Anyone know where we can download the leaked pitch deck?

------
EGreg
I love how they are not doing an IPO

------
intrasight
Limited audience. Limited monitization potential. It's a simple utility app so
there is limited IP. I think this valuation will be as fleeting as the images
they send. But still kudos to the founders for making hay from something so
simple.

------
traviswingo
This is total bs. $54 million in revenue with an $18 billion valuation? I
understand investing in the "future value" of companies, but this shit is
getting out of hand, lol.

~~~
kneel
Their demograph is just graduating high school. They will be very valuable in
the future.

~~~
Phlarp
Isn't this what people said about Facebook when they were at this stage?

I feel as though that has failed to materialize, and their new demographic is
"relatives over 50 desperate to appear 'hip'"

~~~
onewaystreet
People did say that and they were right. Facebook is currently valued at over
$300 billion.

~~~
kirykl
foolishly tho; they have 4B profit on 18B revenue, pretty short of 300B

~~~
mr_tyzic
It's an investor's job to be so foolish.

~~~
kirykl
their P/E ratio is huge, they are not worthless just overvalued

------
jbob2000
Wow, this is kind of scary. Snapchat is so clearly a fad, I don't know what to
say to these investors. Most of their users are youth, who will drop Snapchat
in a second once it isn't cool. As soon as moms and marketers get on it, the
service is dead.

Having your messages disappear was kinda cool, but they're starting to ease up
on that a little (you can re-view some snaps, always possible to screenshot
the app to save the picture). The whole dog-face, barfing rainbows thing is
getting tired now, everyone knows how these work, it's nothing special any
more. They have some sponsored content, but the user is under no obligation to
view it.

