Greenwood Trading says mobile messaging app, Snapchat’s latest round of capital raising reportedly values the business at $10 billion.
Japan – Greenwood Trading says Snapchat, the mobile messaging app company that turned down a $3 billion buyout offer from Facebook last year has had its value pegged at $10 billion after highly-respected tech-sector venture capital firm Kleiner Perkins Caufield & Byers invested $20 million in the company’s latest round of capital raising.
The popular app which allows users to communicate with each other by sending pictures that auto-delete after a few seconds has yet to generate any revenue but Kleiner Perkins Caufield & Byers, which was an early investor in Google and Amazon, apparently believes there is potential for significant monetization.
“It’s hard to see the value in some of these tech startups given there are so many of them but Snapchat does seem to have something of a captive audience so we think it would unwise to dismiss it as a fad,” said Paul Iurio, a technology analyst at Greenwood Trading alluding to a recent survey which showed that 26% of 18-29 year olds use the app.
Snapchat is considering ways in which it can monetize the popularity of the platform but without alienating a notoriously fickle demographic of younger users who may not take kindly to ads.
“To be honest, that was the big fear for Facebook and Twitter but both seem to have successfully integrated advertising without experiencing a mass exodus,” added Iurio.
Greenwood Trading said that while tech startups would likely continue to bring excitement and innovation to investors looking to be on board with the next big thing, it was worthwhile exercising caution with stock markets at or around all-time highs.
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