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Insanity: Snapchat raises $1.81b Series F, total funding now stands at $2.63b
Messaging app maker Snapchat, Inc. has raised $1.81 billion in a Series F round, the company disclosed in a financial filing Thursday.
The round itself was raised over a full year and included previously disclosed investments including $175 million from Fidelity Investments in March, and its original Series F round from May 2015 which was priced at $650 million
According to The New York Times, new investors in the round included General Atlantic, Sequoia Capital, T. Rowe Price, Lone Pine and Alibaba.
A valuation on the raise was not disclosed, although it is generally believed that the figure is $16 billion.
Snapchat itself continues to have mixed fortunes; while the company remains extremely popular with millennials, with some 200 million users and some 77 percent of all college students using the service daily, is has struggled to bring in revenue from its user base.
According to a separate report from TechCrunch, Snapchat made $59 million in 2015, which is way up of the measly $3 million it was said to have made between April and December 2014, but what hasn’t been disclosed is how much the company has been spending in the meantime; given the raft of new services they’ve launched over the last twelve to eighteen months it’s likely to be a multiple times higher than the $128 million they burned through in 2014.
Spendaholic
When news of a further investment in Snapchat broke in March, we described Snapchat as being a spendaholic, and news that they’ve raised even more money goes to provide the point.
It bears repeating:
What are they spending so much money on?
It’s a chat service, they’re not building rockets to go to the moon (it should be noted that Space X has only raised a flat $1 billion to date). And while there are naturally hosting costs, as well as a constant need to improve the service, let alone find a sustainable business model, that’s an insane amount of money in every sense of the word.
Including the new round, Snapchat has raised a staggering $2.63 billion to date from investors (those not previously mentioned in this article) including Tencent Holdings, SV Angel, Lightspeed Venture Partners, Benchmark, General Catalyst Partners, and Institutional Venture Partners (IVP).
Image credit: 67683836@N02/Flickr/CC by 2.0
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