Snapchat celebrates the New Year early with $485.6M in new funding

By Michael Carney , written on December 31, 2014

From The News Desk

Snapchat has raised $485.6 million in new funding, according to a new SEC filing published today under the cover of New Years Eve. The Series D round, which was first reported by Circa, included a total of 23 (undisclosed) investors, and follows rumors in recent months that Alibaba, Yahoo, and Kleiner Perkins would participate and that the company would receive a valuation of $10 billion. Whether the company ultimately reached that lofty value remains unconfirmed.

It seems like ages ago that Snapchat reportedly turned down $3 billion-plus acquisition offers from both Facebook and Google. In the year or so since these unconsummated deals were first revealed, Snapchat has rolled out its wildly popular Our Stories live-event experience, introduced its SnapCash payments product in partnership with Square, and begun introducing brand advertisements to its platform.

On the other side of the coin, Snapchat has faced a number of potentially damaging scandals. This includes the hacking of one or more unauthorized third-party applications tapping into its platform, the publication of hateful and misogynistic college emails written by CEO Evan Spiegel, and the release of sensitive product roadmap and business development information as part of the recent Sony Pictures Entertainment hack.

But, despite all of the above, and conceding that concrete performance data is hard to come by, all indications are that Snapchat’s popularity and engagement levels continue to rise.

The remaining question for the company’s new and existing investors is how lasting will its engagement prove to be and how effectively can it be monetized. Unlike Uber, AirBnB, or Dropbox – three other still-private startups rumored to be in the $10 billion-plus valuation club – Snapchat does not have a transactional business model.

At just three years old and with a rapidly evolving product, Snapchat remains an early-stage business. With fresh capital and nearly $650 million in total funding to date – and roughly 150 total employees – the company has plenty of runway to figure out what it wants to be when it grows up. Tonight’s New Years Eve Our Story will offer users a view of celebrations around the global and at the same time will provide a glimpse into the role Snapchat hopes to play in the way future stories are told.