Snapchat's long-anticipated round of financing has finally closed. The photo messaging app has raised $60 million from IVP* at an $800 million pre-money valuation. Initial reports stated the fundraise could be as large as $100 million. General Catalyst, SV Angel, Benchmark Capital and Lightspeed Venture Partners also invested. Sony Entertainment CEO Michael Lynton is joining the board.
Snapchat rivals Instagram in terms of daily photo shares on the app. The founders say 200 million photos messages are being created on Snapchat per day, up from 150 million two months ago. The 17-person team is based in Los Angeles and was founded by two Stanford graduates.
One refreshing thing about Snapchat: One of its 17 employees is a VP of Monetization although efforts to start making money will be in the "medium" not "short term," the company says. When it does decide to start monetization efforts, Snapchat will likely eye in-app purchases.
Evan Spiegel, one of Snapchat's founders, says the funding is "almost all about scaling."
When we launched Snapchat in September 2011, we were finally ready to share something we loved with the rest of the world. We had created a different way to communicate with our friends - it felt more personal, and it was a lot more fun. We hoped the rest of the world would love it too.
The response has been absolutely mind blowing. Less than two years later, Snapchatters are sharing over 200 million snaps every day. And thanks to our incredible and hardworking team, we’ve been able to support the growth of Snapchat with minimal overhead.
But in order to continue scaling while developing the Snapchat experience, we needed to build a bigger engineering team and figure out how to pay our server bills.
We’re fortunate to welcome IVP to Team Snapchat as the lead investor in our recent Series B financing. General Catalyst, Benchmark Capital, Lightspeed Venture Partners, and SV Angel also participated in the round. We are thankful for their belief in the Snapchat community and we look forward to working with them as we continue to grow.
We have also added Michael Lynton as an independent board member. Michael is a remarkably talented and creative executive who believed in Snapchat way before it was cool. He is a tremendous role model and we are grateful for his time and energy.
Long story short – we’re committed to building a big company around an innovative and fun product. And we know we can’t do it without you. So thank you for your endless support and enthusiasm for Snapchat. It means the world to us.
There are some really exciting surprises around the corner…
*IVP is an investor in Business Insider
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