Only a few months after closing a Series B round of $60 million that valued the ephemeral messaging company at $800 million, Snapchat has been in talks for another funding that values it at up to $3.6 billion, according to sources close to the situation.
Sources also added that the funding itself would be in the hundreds of millions of dollars and that the lead investor might be a strategic party from Asia. However, a Snapchat spokeswoman declined to comment.
Due to Snapchat’s rising popularity and its valuation going up, several strategic players and institutional investors are interested in the popular app.
According to the Wall Street Journal report, Facebook creator and CEO Mark Zuckerberg offered those at Snapchat to sell the company to him for a staggering amount of $1 Billion. However, Facebook was rebuffed by co-founder and CEO of Snapchat, Evan Spiegel, who was not interested in selling his service to the social network, according to those people
Mashable notes that’s the $1 billion number may sound familiar because it’s exactly what Facebook paid to acquire another photo-sharing app, Instagram, just last year. The deal was roundly lauded as a move that could help bolster Facebook’s staying power, as it struggles to hold onto users who are growing tired of blogging about their lives, instead preferring to share photos via mobile apps.
The acquisition of Snapchat acquiring Snapchat would help Facebook corner the market on popular photo-sharing apps, as well as help the social network attract a younger demographic. The latter issue is particularly important, as some reports say younger users are beginning to lose interest in Facebook.
Launched in 2011, Snapchat has grown into a wildly popular mobile app in a relatively short span of time, effectively creating an entirely new genre of messaging category with its “ephemeral” pictures and videos that last for only a matter of seconds.
It lets people take videos or pictures and send them to friends for a short period of time. After a few seconds, the image disappears and can never be viewed again.
In September, the service reported that it was processing some 350 million “snaps,” or messages, per day, up from 200 million in June. According to one person briefed on the matter, the service is not quite the size of other large messaging apps, but users come back to it frequently.
Recently, the company has begun to experiment with features outside of its core ephemeral messaging service. Last month it launched launched its Stories product last month, essentially a long-form play on Facebook’s status update in the form of a picture or video. And recently, Spiegel has grown more keen on the idea of monetization, experimenting with bands and listening to music inside the app.
Snapchat’s last round — which it called a “scaling round” for infrastructure improvements — was announced in late June, led by Institutional Venture Partners, with participation from General Catalyst Partners and SV Angel. Previous investors Benchmark Capital and Lightspeed Venture Partners also participated. With that round, the company had raised around $75 million in total, reports AllThingsD.
If reports of the one billion dollars offer from Facebook are confirmed, it would place Snapchat in the same category as startups such as Instagram and Google-acquired Waze. Facebook and Snapchat did not immediately respond to requests for comment.