Photo-messaging startup Snapchat rejects Facebook’s $3 bn bid: report
15 Nov 2013
Snapchat, the photo-messaging startup website popular with teenagers, had reportedly turned down a $3 billion takeover offer from Facebook.
Citing sources close to the negotiations, The Wall Street Journal yesterday reported that Facebook had offered to buy Snapchat in order to hold on to its declining teenage users.
But Snapchat's co-founder and CEO, Evan Spiegel, did not want to sell or consider major investments until at least early next year, the report said.
Had the deal to go through, it would have been the most expensive acquisition by Facebook, topping the $1 billion it paid for Snapchat's competitor Instagram in April 2012. (See: Facebook to acquire photo-sharing app maker Instagram for $1 bn)
Snapchat, the photo messaging application, was created by Stanford University students Spiegel and Bobby Murphy in 2011.
Snapchat is reported to have over 5 million active daily users, most of who are between the age group of 13 and 23 years, who send around 350 million snaps every day with a storyline through Snapchat.
Los Angeles-based Snapchat has now emerged as the latest social-media craze among teenagers, which allow them to send photos that are deleted from the servers after they are opened by the recipients.
Most of Snapchat's infrastructure is hosted on Google's cloud computing service, App Engine. Most of its data, including unopened Snaps, are kept in app engine's datastore until they are deleted.
Apart from Facebook, other investors had also recently courted the company, including China's Tencent Holdings, which would value the company at $3.6 billion, but Spiegel has turned down all offers on the hope that Snapchat's valuation will grow along with its fast increasing number of users.
Snapchat has raised around $73 million from investors, including Lightspeed Venture Partners, Benchmark Capital, Institutional Venture Partners, SV Angel, Institutional Venture Partners, and General Catalyst Partners.
