Snapchat, the popular photo messaging app, has raised $485.6 million in the last funding round in August, based on a U.S. Securities and Exchange Commission (SEC) filing the company made on New Year's Eve.
Snapchat was founded in 2011 and is the brainchild of Stanford students Bobby Murphy, Evan Spiegel and Reggie Brown. The service currently accounts for over 100 million users who are aged between 13 to 25 years old.
The service gained popularity for its innovative concept of sending photos and texts that vanish seconds after they are viewed. The company says that its app users send over 700 million snaps per day and over 500 million stories are viewed daily.
Such is the popularity of Snapchat that Facebook Inc. offered to acquire it for $3 billion, but the former declined.
Snapchat is estimated to be valued between $10 billion to $20 billion and its existing investors include General Catalyst Partners, DST, Lightspeed Venture Partners and Benchmark.
According to the SEC filing, nearly 23 unidentified investors took part in the equity raise for the Los Angeles-based company. The filing also revealed the date of sales as April 2014. The company has raised $648 million so far.
TechCrunch reported that SnapChat initially aimed to raise $40 million, but when it saw demand for the funding round increase, the company decided to target $900 million. However, the ambitious figure did not seem feasible, and Snapchat shifted to $500 million instead. The names of the company's new investors are not known, but it is rumored that venture capital firm Kleiner Perkins led the latest round of funding.
"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 [fundraising], closed some time ago," noted the publication.
If you're wondering why Snapchat requires the money, it is because the service currently shells out nearly $30 million every year, of which 50 percent is given to Google as fees for hosting its snaps online. Moreover, $3 million is paid in legal fees by the company.
To give its management a boost, Snapchat recently hired Facebook's Mike Randell to lead its advertisement tie-ups. In December, Snapchat made Credit Suisse Group's Imran Khan chief strategy officer.
