Business in Tech

Snapchat (aka Snap) Files For $3b IPO In A Move That Could Value It At $25b

Well it happened eventually. We were all over the Snapchat (now Snap) IPO and now it’s really happening.  The company filed for a $3b IPO and from what we see on the Securities and Exchange Commission (SEC) website, the company says Apple and Google are competitors even though they make software (mobile operating system) that its App runs on. As it is, Snap Inc is now in the wearables business with the launch of Spectacles; a connected sunglass that’s capable of recording 10 second videos last year. Away from the mobile operating side, they mentioned products like YouTube from Google, Messenger/WhatsApp from Facebook and Twitter among others as major competitors. A report earlier this week says brands are now reporting declines in Snapchat Stories usage by as much as 40 percent and that’s the problem.

But while Facebook has been accused of trying to squeeze the life out of Snapchat, others think Snapchat has not been able to appeal to a wider audience and this is evident in the number of users on both platforms. Snapchat for example reported yesterday that it now has 161 million daily active users and this is up from 110 million the previous year compared to Instagram’s 500 million users. Breaking it down further, they reported that 60 million of its users are located in the United States with another 53 million in Europe. This shows the limit of Snapchat’s 161 million numbers compared to Instagram which has a more even usage globally. 70 percent of Instagram users are outside the United States while 60 percent of its users log in daily to use the service and seeing as it has 500 million users, it now has about a third of internet users globally. About 49 percent of brands globally use Instagram and of the top 100 countries in the world, about 90 percent of them have Instagram accounts.  

Well with Spectacles, Snapchat could just be in for a good 2017 and this means the company wants to be a big player in the augmented reality (AR) market which is projected to be worth $162b by 2020. The $3b Initial Public Offering (IPO) could value Snap at $25b eventually.