Risqué photo-sharing app Snapchat has convinced VCs its saucy-selfie-sending service can provide serious returns for their $60m investment in its latest funding round, led by venture capital company IVP.
The app firm said on its blog that it has also attracted Sony's US chief exec Michael Lynton to its board, after the deal that values the firm at a widely reported $800m.
The latest cash injection will be used to expand the engineering team and hire more servers, the company said, to support over 200 million photos shared every day. The app is popular with da yoof, many of whom are known to use the built-in photo-disappearing function to help them send smutty shots of themselves to
world+dog carefully chosen recipients.
Snapchat, set up by Stanford University students in 2011, lets folks share picture messages on Android or iOS. Crucially, it allows the sender to set a time limit for how long the pics can be viewed, after which they're automatically erased. However, the firm has been accused of not being quite foolproof enough, allowing tech-savvy folks to download and save photos that should be deleted.
The app's valuation has led to some incredulity in the marketplace, considering Facebook spent only a little more - $1bn - on picture powerhouse Instagram last year. Funding leader IVP has published a list of ten reasons why the app is worth it.
The firm, whose current fund is capitalised at $1bn, said in a statement that it only makes eight to 12 new investments every year, but it wanted to "follow the smart money" into Snapchat.
"It’s no secret that Snapchat has yet to turn on its monetisation engine. Despite this fact, the financing was intensely competitive – one of the most competitive financings we have been a part of in years," IVP said.
"Snapchat’s early investors include Benchmark Capital and Lightspeed Venture Partners, two of the top venture capital firms in Silicon Valley.
"IVP co-invested in Twitter along side Benchmark in February 2009. That investment has proven to be one of the most successful in the history of our firm. We also co-invested with Benchmark in MySQL, which Sun Microsystems acquired in 2008 for $1bn." ®