The new funding is technically part of that same round, according to The WSJ, as Snapchat had set aside some additional shares at the time that it could sell in the future.
Advertisement
With the funding, first reported by the Wall Street Journal, Snapchat maintains its previous $16 billion valuation, per the report. Global economic jitters in recent months have led investors to take second looks at publicly traded companies’ earnings prospects. The VC firm had purchased shares in March 2015 at a similar price.
Nevertheless, Snapchat’s performance during the past year has been impressive indeed, with the company becoming the sixth most highly-valued venture-backed firm in the world. Many more of the deals also included more favorable terms for investors.
Other investors in Snapchat include Alibaba Group, Benchmark, General Catalyst Partners, Glade Brook Capital Partners, HDS Capital, Institutional Venture Partners, Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, York Capital Management and Yahoo. Parts of the website may not work as expected without them. Silicon Valley might like to think this sky-high growth in valuations can go on and on, but it’s just not sustainable in the long run.
Snapchat is one of the top examples of American startups that have received huge valuations despite little revenue. Over 100 million people use the network with eight billion videos being watched a day.
It’s surely a little knee-jerk to claim this heralds the tech start-up apocalypse, but it is a sign of increasing investor caution towards what have been some of the most promising companies in the tech sector. That was more than the $10 billion valuation in a December 2014.
Advertisement
Snapchat and Fidelity Investments were not immediately available for comment outside regular US business hours.
