February 10, 2013
Snapchat Raises Over $13 Million In Venture Funding
redOrbit Staff & Wire Reports - Your Universe Online
Los Angeles based startup photo-sharing service Snapchat has raised a reported $13.5 million dollars in its first round of venture funding.
The social-media app allows users to send photos that can only be viewed for a brief period of time — which is controlled by the sender — before they essentially self-destruct. The recipient of the original picture can then send one back in return, and that image, too, disappears following a short, pre-determined period of time.
Not only has Snapchat been popular enough to have inspired a Facebook knockoff known as Poke, but now it has garnered millions of dollars of funding from Benchmark Capital and other investors, according to CNET´s Edward Moyer.
Benchmark has valued the start-up at $60 million to $70 million, he added, and Rebecca Grant of VentureBeat noted that the service is used to send more than 60 million messages each day and boasts “millions of users.”
The initial buzz surrounding Snapchat might have surrounded its usefulness for sexting — despite the fact that some computer experts have discovered ways to view the photos after their expiration date — but co-founders Evan Spiegel and Bobby Murphy insist that the application´s usefulness is more universal.
“You can´t build a business off sexting. It´s such a specific-use case. This is about much more than that,” Spiegel told the Jenna Wortham of the New York Times on Friday. Murphy said that the service was essentially “a digital version of passing notes in class,” and Spiegel added that they believed that there was “real value in sharing moments that don´t live forever.”
Apparently, investors such as Benchmark´s Mitch Lasky agree. Lasky told Wortham that he initially heard about Snapchat from his teenage daughter, and said that he became “curious” about the service after hearing it mentioned “in the same context as Twitter, Instagram and Facebook.” He confirmed that his firm was aware of the service´s reputation of being a sexting app, but said that they see “bigger picture” potential for it.
“People are looking to communicate in a real way. The real self, as opposed to the projected self. That was the piece that resonated the most with me,” Lasky told the Times. Potential money-making uses for Snapchat include “allowing advertisers to send coupons or fashion ideas,” Wortham explained.
According to Grant, most Snapchat users are between the ages of 13 and 25, and are concerned that sharing embarrassing photos or other media content could be detrimental to them later in life, costing them a job or a promotion, for instance. CNET reports that as of December, 3.4 million users took advantage of the service — more than twice the number that used Snapchat the previous month.