Kleiner Perkins Investment Gives the Messaging Services a Shot in the Arm
Kleiner Perkins Caufield & Byers has agreed to invest in Snapchat Inc., an ephemeral messaging service, at close to a $10 billion valuation, people with knowledge of the matter said.
Snapchat, which has talked to several potential investors in recent months, is in the process of raising a large investment round that would make it one of the most valuable private, tech startups despite virtually no revenue.
The venture-capital firm committed to invest up to $20 million in May, one person added.
At least one strategic investor has also committed to invest in the round, which isn't yet closed, two of the people said.
A spokeswoman for Kleiner Perkins wasn't immediately available for comment. A Snapchat spokeswoman said: "The valuation of our business and our capital requirements are the least exciting aspects of supporting the Snapchat community. We have no further comment at this time."
Snapchat's valuation, at about $2 billion last year, has soared even as the startup lacks a clear business model. Investors see potential to make money from the millions of teenagers and college students on the three-year-old app, a group that is highly coveted by advertisers and increasingly difficult to reach through traditional media like television and magazines.
New capital could help Snapchat gear up for its first foray into advertising, expected later this year. The company has held talks with media companies and advertisers in recent weeks about a new content service called Snapchat Discovery, a person familiar with the matter told The Wall Street Journal earlier this month. The service that would let users read daily editions of publications, video clips and ads by holding down a finger on the screen, like they do with photos and other messages on the app before disappearing.
Anyone have the text of the article?