Snapchat had a good 2014.
The startup messaging service disclosed to the Securities and Exchange Commission that it raised $486 million from 23 investors. Snapchat is now worth an estimated $10 billion, according to Bloomberg.
Snapchat is a messaging service that allows users to send a photo that "disappears," (unless the wise recipient takes a screenshot of the transient message).
Snapchat spends about $30 million per year, according to Tech Crunch. Half of that goes to Google Apps Engine to host all its photos. The ephemeral message service at one point was spending $3 million in legal fees per month due to numerous lawsuits.
Snapchat's fundraising takes a departure from typical methods. Usually, a capitalist will have a specific amount of money in mind before getting investors to agree and close. Twenty-three-year-old founder and CEO Evan Speigel takes a different approach. "He goes after individual investors at different valuations," one source said, according to Tech Crunch. "It's a rolling investment and a rolling close. In theory you could say he's already done 40 rounds."
That could mean that Snapchat has raised $500 million in just six months. Three-quarters of that might be closed, so the company's value could be closer to $20 billion, up from last year's valuation of $2 billion, according to The Wall Street Journal.
Alibaba Group Holding Ltd. was reportedly considering investing in Snapchat, but decided to pass. Kleiner Perkins Caufield & Byers has agreed to invest up to $20 million by May 2015. Snapchat is arguably the most valuable startup, but still fails to generate revenue.
"The valuation of our business and our capital requirements are the least exciting aspects of supporting the Snapchat community," a Snapchat spokesperson told The Wall Street Journal. "We have no further comment at this time."
Snapchat isn't the only startup having a good funding round. In December, Über closed their first round worth $1.2 billion and Xiaomi, a Chinese smartphone maker said to be giving Apple and Samsung a run for their money, said it raised $1.1 billion contributing to a $45 billion valuation, according to USA Today.
