Snapchat, the popular ephemeral messaging service, raised $485 million (roughly Rs. 3,060 crores) in the latest round of funding in August last year, and not $20 million (roughly Rs. 126 crores) as was initially reported.
As per a SEC Form D that was filed on Wednesday, the funding round was led by venture capital firm Kleiner Perkins and included 23 investors. So why the huge discrepancy between the initial reports and what actually happened - Techcrunch explains:
Here is what happened, according to our sources: Snapchat originally set out to raise $40 million, but demand for the round skyrocketed, and it decided to shoot for an ambitious $900 million instead. When that didn't work out, it dialled it back to $500 million. Rumor has it that Kleiner is leading this latest round, with GIC, Yahoo and maybe wildcards August Capital participating. Portions of that, such as the Yahoo part of the fundraise, closed some time ago. The SEC filing notes that the date of first sale was in April 2014.
Techcrunch adds it has "heard that the current post money valuation is $20 billion (roughly Rs. 1,26,300 crores), although others have disputed this and said it's closer to $10 billion (roughly Rs. 63,160 crores)."
In case you are wondering why the startup needs so much money, the report explains that Snapchat is currently shedding $30 million (roughly Rs. 190 crores) per year, half of which goes to Google for hosting its photos online. Also, the messaging app firm is paying $3 million (roughly Rs. 18 crores) every month as a legal fees.
Snapchat rocketed to popularity, especially among teens, after the initial app was released in September 2011. Created by then Stanford University students, the app allows sending of text and photo messages that disappear seconds after being viewed. The company had last year rejected a buyout offer from Facebook, judging the $3 billion (roughly Rs. 18,950 crores) offer too low.