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Is Snapchat really worth $40 billion?

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Earlier this month news broke out that Snapchat Inc. had chosen Morgan Stanley and Goldman Sachs to lead their initial public offering (IPO) as the company gears up to go public soon. 

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Snapchat Inc’s last private funding round raised $1,8 Billion in investments from across the world as private investors rushed to get a piece of what is fast becoming the most entertaining social media platform in the world. 

After its last round of funding, Snapchat had a private market value of $18 billion but that could soon double with its IPO set for March 2017. 

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Bloomberg reported that Snapchat Inc looks to raise at least $4Billion from its IPO giving the company a market value of $40 billion in what is expected to be the biggest IPO since Twitter went public in 2013. 

A lot of concern has been raised on Snapchats rush to go public as other tech companies like Uber and Air BnB look to remain private and raise capital from private investments and loans. Going public means making everything about your company public, and like in Twitter’s recent case, it can come back to haunt you when things don’t go as planned.

However, Snapchat may see this as an opportunity to capitalize on all the hype around it at the moment. The IPO could help the company recapitalize to explore new product of offerings and focus on expansion.

If Snapchat went ahead with this and was able to raise the $4billion it would make it the second most valuable social media company behind Facebook and beating the likes of Instagram, Twitter, and Pinterest. But the question still remains of whether Snapchat is really worth $40 billion or is aiming too high?

Zimbabwe has its own Snapchat following which is growing in numbers but hindered by the high costs of data (Snapchat doesn’t have a social media bundle). Zimbabweans have also capitalized on the platforms ability to reach audiences across the world through initiatives like ZimConnnect which allows Zimbabweans to share their stories from wherever in the world through text and video short messages.

If you haven’t paid attention to Snapchat its probably time we all realised how much of a big deal it is now!


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