Snapchat is said to be valued around $10 billion from investors like venture capital firm Kleiner Perkins Caufield and Byers, USA Today reported on Wednesday.
The California-based start-up, which allows users to send disappearing photo messages, had previously been in talks for financing with Alibaba. Though conversations with Alibaba ended without a deal, the startup continued to meet with investors, according to the Irish Times.
Led by chief executive officer Evan Spiegel, Snapchat is the third-most popular app among millennials, after Facebook and Instagram. It's used by 33 percent of 18 to 34-year-olds in the U.S. The app has 100 million active monthly users, a number that rivals some of the smaller social networks like Tumblr.
The $10 billion funding value is more than three times what Facebook CEO Mark Zuckerberg offered to pay for the company last year, making Spiegel look wise for turning it down. Facebook recently paid $16 billion for WhatsApp, which has more than 600 million active users, Mashable reported.
Even though advertising isn't an option, marketers have been finding ways to reach the application's users. Snapchat has yet to go public with a business model, EMarketer analyst Debra Aho Williamson told the Irish Times.
"They're intrigued with Snapchat because they see that usage is growing and it's getting popular among the younger demographic," Aho Williamson said of advertisers. "They see an opportunity to be more creative and test out new types of advertising they can't do on Facebook or Twitter."
Snapchat also authorized 17.4 million shares of new preferred stock in a corporate filing in Delaware on August 4. This is an increase from the 1.2 million shares a month prior.
The company already has $163 million in funding. Its previous investors include SV Angel, Lighspeed Venture Partners and Chinese Internet portal Tencent, according to Mashable.
