Snapchat now said to be valued at $17 billion during latest funding round

Back in 2013, messaging app Snapchat received $60 million in a funding transaction that valued the company at $800 million. From that moment on, the valuation of Snapchat moved higher and higher. By August of 2014, the messaging app was raising money at a valuation of $10 billion. Back then, the app was known for its messages that 'self-destruct' ten seconds after being opened.

Today, Snapchat has become a must-have app for teens. Filters allow users to see themselves on the screen as a glamorous cat, or a beefy motorcycle cop with shades, or as a princess. A member can put his or her Snaps together to create a Story. A new picture added to a Story gives Snapchat subscribers the opportunity to view this particular Story an unlimited number of times over a 24 hour period. By default, a user's friends can view his/her Story, and that can be expanded to include everyone.

With more features added to the app, Snapchat was valued at $15 billion last year. But that figure has apparently risen. According to anonymous sources, a higher value of $17 billion should now be placed on Snapchat. Investors who have recently been paying $30 a share in the later financing rounds, are waiting for the company to go public. When that happens, those who took the huge risk to fund what was originally a longshot, will feel as though they have won the Powerball.

This is capitalism at its finest. Money flows to the company with the better mousetrap, and the wonderful multiplier effect that happens when a company is taken public makes millions for investors. If all goes right, some of those newly coined millionaires will be Snapchat employees who never thought that a simple messaging app would make them fabulously wealthy. This is how 40 Apple employees and early investors became millionaires on December 12, 1980 when Apple went public.

The same routine happens over and over; if there is one thing to be learned, it is that Wall Street is all about repeating patterns. The names change as do the players, but the game itself remains the same. Those backing Snapchat are in line for a big payday down the road. Let's hope that they don't turn into capitalist piggies.

Snapchat's revenue surged to $59 million last year, with estimates for this year ranging from $250 million to $350 million. For 2017, we could see $500 million come into Snapchat's coffers. The app had 110 million daily active users during December 2015, up 50% from the 74 million subscribers that made a daily trip to Snapchat during December 2014.

source: LATimes