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.
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:
- Square raises $200m at a $6billion valuation
- Nutanix rasied $140m on a $2billion valuation
- Pluralsight raises $1oom at a $1billion valuation
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.