Product details

Snapchat, the brainchild of two University students, Evan Spiegel and Bobby Murphy created waves in the instant messaging sector since its inception in 2011. Snapchat was a picture-based messaging application where messages would automatically disappear after a few seconds of being sent. It enticed demography critical to advertisers, ie the teens and millennials. Snapchat became such a rage that Mark Zuckerberg, the CEO of Facebook offered a whopping US$3 billion for a buyout. Snapchat declined his offer and received US$20 million in funding from venture capital firm Kleiner Perkins Caufield & Byers that catapulted its valuation to US$10 billion in 2014. Although the app started to experiment with methods to monetize, it was yet to make any substantial revenue. However, it raised US$163 million in five funding rounds from a number of investors. Its user base grew close to 200 million and the brand was ranked third in the global list of top venture backed firms, becoming one of the most valued start-ups. By 2015, Snapchat was valued at $19 billion with further investments from Alibaba, among other heavyweights. However, industry analysts warned that Snapchat was reeling in a billion-dollar bubble, hinging only on initial investor confidence. They suggested that the billions with which ‘apps’ were being funded in Silicon Valley replicated the dotcom bubble of the 90’s. Snapchat’s biggest challenge would be the justification of its multibillion-dollar tag. Could the loss-making enterprise become a profitable messaging juggernaut? Was it a passing fad or the future of social media communication?