What’s Up with this Snapchat Valuation?

We don’t wade into the waters all that frequently on either public company valuations or VC valuations.  But its been a busy week, and the latest news about Snapchat caught our eye.  In case you missed it, Snapchat (the famously-vanishing messaging app) just raised a round of financing at a $10billion valuation.   KPCB is investing $20million in the company.

Wait, what?

That rings a little hollow, right?  After all it’s a pretty far drive to get from $20million to $10billion.  What exactly is that deal telling us?  This is an awfully small raise at an awfully lofty valuation.  I mean for reference, take a look at some of the other notable raises recently with lofty $X billion valuations:

As far as we can tell, Snapchat is not only a pre-revenue company, they also don’t really have any plan in place on how to eventually get there.  The KPCB guys are pretty astute – I’m certain they’re not investing out of the goodness of their heart.  But nonetheless for those of us that deal with real world valuation issues this one is a quite a head scratcher.