Snapchat, the popular photo sharing app, said that it has received about $537 million in new funding from investors.
With investors pouring in cash without any hesitation, Snapchat has reached to a valuation figure of $16 billion. This is as much as 60% higher than its previous valuation in December. Also, the company started to make moves in this period to monetize over its enormous user base through advertisements.
The latest funding comes less than three months after it raised $200 million at a $15 billion valuation in March. Snapchat has achieved this enormous valuation in just 4 years since commencement of its operations and still continues to rise up the chart. It has raised over $1.1 billion in total venture capital money so far.
Snapchat’s popularity among teenagers provided it the required boost, which drove much of the investors to invest their money into the company. Plus, this popularity doesn’t seem to diminish anyhow and promises a pile of cash return for investors.
However, in this round of funding, the investors— which include Chinese e-commerce giant Alibaba and two hedge funds—received common stock, instead of preferred stock, said the person familiar with the deal.
This diminishes some rights, such as voting and getting paid back first in the event of an acquisition, that investors with preferred shares usually receives over common stock holders.
Investors in the latest round include Glade Brook Capital Partners in Greenwich, Conn., and New York-based York Capital Management. As per sources, the same model was used for its previous funding round held in December.
Snapchat has nearly 100 million users who visit the application everyday. Only this year, Snapchat has started to monetize over its enormous user base by showing ads and other video contents.