New investments into messaging start-up Snapchat put its valuation close to $10 billion, according to the Wall Street Journal, joining other hot startups like Uber and AirBnb. Bobbi Rebell reports.
Playing hard to get- may already be paying off for Snapchat. After reportedly turning down a measly $3 billion offer from Facebook last year- the company may now be worth close to $10 billion, after venture capital firm Kleiner Perkins has agreed to invest up to $20 million in the instant messaging start-up according to the Wall Street Journal. Chat apps are hot says Reuters' BreakingViews Rob Cyran: SOUNDBITE: ROB CYRAN, COLUMNIST, REUTERS BREAKINGVIEWS (ENGLISH) SAYING: "You know you saw Whatsapp. Facebook bought it for $19 billion. And it seems like when you get a lot of users and things grow fast they are worth a lot of money. It's a question of you know, can you actually turn these users into dollars. You know Facebook's done it. Twitter's kind of doing it a little bit. Can Snapchat do it? I have no idea. But they haven't done anything so far." "So far" being key. Investors are after eyeballs- teens especially-because that's what advertisers want. Manhattan Venture Partners' Max Wolff: SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, MANHATTAN VENTURE PARTNERS (ENGLISH) SAYING: "They are fast and early adopters and every product category in the world wants to show them ads. So sending different kinds of messages, charging a premium for those." He says estimates of 100 million users underestimate the incredible value proposition of the Snapchat user- because many send over a hundred messages daily. And while Snapchat is a good candidate for an IPO- Wolff has a list of players who could snap this one up, without looking too hard at the price tag. SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, MANHATTAN VENTURE PARTNERS (ENGLISH) SAYING: "You are looking at the Microsofts- much rumored to be looking at Snapchat by the way. You are looking at Alibabas. You are looking at people like Google, folks like Apple. Really you have to have a huge treasury. You have to have tons of cash. You have to have very valuable shares and you have to be a little bit desperate to make sure you get those users and someone else doesn't." Snapchat has now entered a select $10 billion valuation club- joining car-ride service Uber and room rental service AirBnB.