Snapchat Raises $1.8 Billion From Private Investors
SAN FRANCISCO — Snapchat, the disappearing message service with big media ambitions, has finished raising $1.8 billion, according to a Wednesday filing with the Securities and Exchange Commission.
While most start-ups raise money by putting together a group of investors who buy a specified amount of stock at a particular time, Snapchat collected the capital over more than a year. Snapchat, based in Los Angeles, said in the filing that it began raising the latest round on Feb. 17, 2015.
Over the last year, new investors, including General Atlantic, Sequoia Capital, T. Rowe Price and the hedge fund Lone Pine, have bought stakes in Snapchat, according to people who spoke on the condition of anonymity because the talks were private. Not long after Snapchat began to collect money, the Chinese e-commerce giant Alibaba also agreed to invest $200 million at a valuation of $15 billion. Snapchat’s final valuation could not be learned.
As a private company, Snapchat is not required to disclose the identities of investors or its valuation. A representative for Snapchat declined to comment on the funding. The start-up’s previous investors include Fidelity Investments and Coatue. TechCrunch earlier reported some of the new investors.
Snapchat’s filing lands at a time when venture funding has cooled. Over the last two quarters, funding for venture-backed companies in the United States has fallen, according to PricewaterhouseCoopers and the National Venture Capital Association. In the first quarter of this year, funding dropped 11 percent to $12.1 billion from a year earlier.
Snapchat has proved wildly popular, especially for those ages 13 to 34, a group that is coveted by advertisers and brands that want to become a part of the next generation’s daily habits.
Snapchat was founded in 2011 to let people send messages that would disappear in a matter of seconds. Last year, the company pushed deeper into media when it began Discover, a product that lets users read stories and watch video from media companies like Vice, ESPN, BuzzFeed and Comedy Central. Discover has given Snapchat a way to make money off from its more than 100 million daily active users.
Snapchat splits advertising revenue with the media companies that post material to the service. In exchange for wide distribution, the companies adhere to certain content production commitments.
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