Snapchat Fetches $10 Billion Valuation

Snapchat Fetches $10 Billion Valuation

8-26-14

Snapchat is a social media app that allows people to take pictures, send them to friends and then the pictures will disappear after a few seconds. Snapchat has become very popular very fast and now over 100 million people use the app. Social media has become a great investment in recent years, these companies can make millions in revenue selling data to marketing firms and through advertising. Snapchat has talked with several potential investors within the last month and has the potential to raise millions. Snapchat is in the process of becoming one of the most valuable private tech startups, even without almost any revenue.

Snapchat has become very popular with users already and investors see the potential for big returns. Many different venture capitalists have been looking into investing in the app. These social media apps have great value to marketers because of the data they can gain to learn more about the type of people who use the apps. Once data is gained the marketers can advertise correctly to the target market with the app, this is very important because the type of individuals using social media applications the most are more difficult to reach through traditional advertising.

There are many good things about social media applications and a lot of revenue can be made with the advertising target bases they have. So one might think why does everyone not invest in social media applications? Although there is a lot of potential for big returns, a lot of risk is also involved. Investing in the early stages of any business involves more risk than investing in a company that has proven to be profitable over years. Many attempts at social media such applications such as Facebook and Twitter have grown significantly and proven to be a wise investment. However, many more have failed without ever becoming profitable. Snapchat is not in the initial stages of business but the company is still a new concept....