Silicon Beach Sundays: Venice-based Snapchat Raises $80M on a $880M Valuation

Silicon Beach Sundays

One of the hottest startups in LA’s Silicon Beach right now is SnapChat an app for sharing moments with friends. 50 million snaps are taken every single day and it is now being valued at $800 million dollars based on a recent $80 million dollar raise from Institutional Venture Partners (source – TechCrunch). The startup is based in Venice which is located between Santa Monica and Marina del Rey and they don’t work out of some giant office building, that’s really not very, well, Venice. Instead they work out of this awesome blue beach house:

Snapchat Offices

Another $80M brings Snapchat’s total funding up to $96 million dollars and with an $880 million dollar valuation the and money in the bank everyone is wondering what will Snapchat do next? For app makers with such rapid user growth reaching new audiences is critical, investors want to see more users coming on every single month.

I’ve heard lots of comments about how Snapchat is insanely over-valued since they are worth close to a billion dollars but are yet to have any defined and sustainable revenue model. Still, it’s 2013 and active engaged users are gold, and as most people know it’s not as simple as building an app and hoping people will use it, getting traction like Snapchat has seen is a one in a million scenario.

Go ahead, search the app store and you’ll find plenty of apps that people use to share content on every day. Some have thousands of people sharing at once, but very few have the same amount of user activity as Snapchat, Instagram, Twitter, Facebook and the few others that you all know, but might not all use personally. It’s always easy to look at a situation and say, “anyone can do that,” nothing could be further from the truth.

I think Snapchat is absolutely rocking it, they’re building a great company and millions of people around the world are using and enjoying it. As always I’d love to hear from you, what do you think about Snapchat’s $880 million dollar valuation?

{ 4 comments… add one }

  • Domenclature.com June 24, 2013, 1:30 am

    What do I think of Snapchat.com?

    I can wisely say that it is aborning. If you rather an adjective? How bout inchoate. Yeah, that’s it. There’s not much you can think of a rudimentary, perhaps incipient, nascent, formless, social medium in 2013.

    I reserve my judgment for full-blown, full-fledged, mature, ripened ones, even then, I still don’t know what’s the use of them. There’s nothing like companies and individuals developing and using their own domains and websites. Social media could be over-rated. I don’t know if we need yet another one of those. ;-)

  • Jacob Fedosky June 24, 2013, 1:44 am

    Morgan,

    Snapchat definitely seems to be gaining traction – but $880m? That seems a bit high for a company that doesn’t appear to be generating any revenue at all.

    I think I’m just out of touch with how start ups are valued. I realize engaged users are valuable but how can Snapchat capitalize on that? I’m curious to hear your thoughts.

  • Joe June 24, 2013, 2:59 am

    Snapchat is in short a system for sending photos, videos … adolescents to use the best online users and the largest to make money how to make this application. Now Vien immediately deleting after viewing the photo or video is seen to be believed.
    For me it is a good application the cost of it does not know, but economic performance is very best.

  • Alan Dodd June 24, 2013, 6:00 pm

    Well, these seems like the one that came up the other day.

    While current revenue might be small, it’s massive play on future expected revenue from the userbase.

    At some stage it must materialise, or else be part of an even bigger “userbase” sale up the river.

    That’s the bet.

    This is an app, and I have no idea about how this would happen, but obviously a lot of people feel it’s a good bet.

    For many website plays like this (sales based on userbase), I am beginning to think it comes down to “how can we flog advertising on this damn thing” :)

Leave a Comment