Snapchat has received a lot of attention lately with reports of a $100 million funding round at a valuation of about $10 billion. This would give the ephemeral messaging company the largest valuation for a pre-revenue company ever, a spot previously held by Twitter. Lightspeed Venture Partners was Snapchat's first investor in April 2012, in a round clocking in at a mere $485,000. Since then, the company has raised some $128 million in venture funding, enlisting big names like General Catalyst Partners, Institutional Venture Partners and Benchmark Capital. Its last fully reported round, a $54.5 million Series B, was raised at a valuation of $2 billion, which was raised after Snapchat rejected a $3 billion acquisition attempt from Facebook (NASDAQ: FB).
Snapchat may not have any revenue, but it reportedly has over 100 million active monthly users, with an estimated two-thirds of those using the app each day. With its staple function a 10-second, disappearing video message, Snapchat generating ad revenue seems a bit complicated, yet new functions such as a real-time video and text chat added in May, and Snapchat Discovery, a feature that collects publications, video clips and ads for daily reading, hints at the company's possible path. Perhaps Snapchat will slowly integrate revenue streams, similar to the WhatsApp subscription model. Or perhaps tech giants may court it once more, and again like WhatsApp, one offer will prove just alluring enough. One thing is certain: with its heap of cash and hype, Snapchat exemplifies the short list of companies that find all the money they need in private financings, and have no need of IPOs or acquisition.