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Snapchat: 100 million monthly active users; valued at $10 billion by Kleiner Perkins investment

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Kleiner Perkins put in $20 million for ... 0.2% of Snapchat ?!

Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers has agreed to invest $20 million in Snapchat in a round that values the ephemeral messaging service at a remarkable $10 billion, according to a report in the Wall Street Journal that cites people familiar with the matter.

It seals Snapchat’s place as one of the world’s most valuable private tech startups, despite the fact that it has yet to make a penny in revenue. According to a separate report, Snapchat’s user base has grown to 100 million monthly active users as it explores nascent business models such as advertising, money-transfer and content discovery.

Last month Bloomberg reported that Snapchat, which had spurned a $3 billion takeover offer from Facebook last December, was in talks with Alibaba over a funding round that would also value it at a much-higher $10 billion. Weeks later, reports indicated those talks had broken down.

Snapchat has raised $163 million to date in five funding rounds from seven investors, including $50 million from hedge fund Coatue Management.


At $10 billion, Snapchat is worth $100 per monthly active user.

On Snapchat celebrities and advertising:

The gist of the article:

McBride, better known as “Shonduras,” is Snapchat’s first homegrown celebrity and one of the first people to make money off of his intricate Snapchat art. Brands are shelling out up to $30,000 for advertising deals with McBride and other power users, hoping to reach Snapchat’s demographic: the fickle and influential 13- to 25-year-old bracket.

Brands like Disney, Taco Bell, Major League Soccer and television networks see what McBride, a 27-year-old from Utah, can make for them: branded content with authentic Snapchat style that teens will actually pay attention to.

“I think brands are starting to notice now that they can put something on Instagram or Facebook, but the youth isn’t on Facebook, and if they’re on Instagram, they’re going to just scroll past it,” McBride said. “But with Snapchat you have their undivided attention, they’re holding down the screen, and it’s awesome. When else does that demographic spend seven seconds just soaking something in? They don’t. They’re too fast. So I think Snapchat really nails that.”


GrapeStory, a talent agency that signs Vine and Instagram stars and helps them get branded gigs, recruited and signed McBride as its first Snapchatter in June. Niche, a company that helps brands connect with social media stars on platforms like Instagram and Vine, is working with Michael Platco, or “mplatco,” a 25-year-old Snapchat artist who has done branded content for Disney and Grubhub.

“We’re incredibly bullish on Snapchat as a new medium,” said Darren Lachtman, the co-founder of Niche. “Tons of our brand clients are asking what we can do on the Snapchat stage. We haven’t done standalone Snapchat campaigns, but if we talk again in a month I’m sure that’s going to be different.”

Jerome Jarre, a 24-year-old Vine star and a GrapeStory co-founder, believes Snapchat is the future. Jarre gained millions of followers on Vine with goofy videos starring unsuspecting strangers. But in the past month, he has set Vine aside and shifted his focus almost entirely to Snapchat.

He tweets constantly about his new Snapchat stories, consults with McBride when brainstorming Snapchat ideas and is convinced McBride is on the verge of making it big, just like he did last year on Vine.

“I remember the month I moved from 20,000 to 1 million followers,” Jarre said. “That’s happening to him right now. Two months from now Shaun’s going to have a million followers. It’s history repeating.”

Really? Snapchat? Really?

December 2014:

Snapchat now claims 200 million users and raises $500 million more:

Allegedly Snapchat is worth $20 billion:

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