It was only last year we were scratching our heads at the $800 million valuation. Then came the story that facebook made a $3 billion cash offer for the app, and now a mere 10 months on they are valued at a staggering $10 billion.
The valuation is based on the fact that venture capital firm Kleiner Perkins Caufield & Byers are reported to be investing around $20 million for a less than 1 percent stake in the company.
Obviously the fact Snapchat has yet to make any money doesn’t seem to matter. The important thing is that it has 100 million active monthly users. How the fuck are they going to make money? Does anybody care? What will be the next 4 year old company (idea) to be worth several billion?
“For some, the high worth that blue-chip investors are putting on Snapchat recall the frothy dot-com era, when money-losing companies with only the vaguest of business models were quickly ushered into the public market. At the time, the conventional wisdom was that the fundamental nature of business had changed — old metrics like profit and loss were out, “eyeballs” were in, as Internet companies raced to grow their audience as quickly as possible.”
Crazy times. I’m off to think of a way to get loads of people to use something that isn’t that useful.