The messaging application, which has more than 5 million new users every day, would have become the social networking site’s most expensive acquisition.
Snapchat, the fast-growing and popular messaging service, has rejected a $3bn buyout offer from Facebook, The Wall Street Journal reports.
“Snapchat Inc. co-founder Evan Spiegel in recent weeks spurned an all-cash offer from Facebook Inc. for close to $3 billion, according to people briefed on the matter,” the publication reads.
“The offer, and rebuff, came as Snapchat is being wooed by other investors and potential acquirers. Chinese Internet giant Tencent Holdings Ltd. had offered to lead an investment that would value Snapchat at $4 billion.”
The famous messaging system was reported to have more than 5 million active daily users and, as a recent research claimsw, has been downloaded by 9% of US mobile users.
The app allows its users to send messages and images with an expiration date so that they are deleted from the recipient’s mobile device shortly after they are received. In September Snapchat announced that it was handling over 350m messages a day.
If sources are true to live, Evan Spiegel, Snapchat’s co-founder and chief executive, 23, doesn’t want even consider any offers until early next year hoping that the company’s numbers will grow enough to justify an even larger valuation.
A Snapchat spokeswoman declined to give any comments.
“The company’s valuation has been growing as fast as its user base. In June Snapchat raised $60m from investors that valued the company at $800m. Facebook reportedly offered $1bn for Snapchat earlier this year,” The Guardian reports.
Last month All Things D published an article where it insisted that Snapchat was in negotiations with China’s Tencent over an investment that would value the firm at over $3.6bn.
Back in October Facebook creator and CEO Mark Zuckerberg offered those at Snapchat to sell the company to him for a staggering amount of $1 billion.
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.
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.