👻 Snap (formally known as Snapchat) filed for an IPO (first time that the stock of a private company is offered to the public). Snap are looking for a $25 billion valuation, it’s twice as expensive as Facebook’s IPO, and nearly 4x times as expensive as Google’s.
Here’s a few things you might wanna know:
1. Money💰
Revenue: 📈 — $404.5 million
Net Losses: 📉— $514.6 million
Like many burgeoning tech startups, Snap warned that it “may never achieve or maintain profitability.”
Operational costs: $520.4 million 📉
Its global average revenue per user for the three months ended in December 2016 was $1.06, up from 31 cents in the year-earlier period.
🤑 98% of Snap’s revenue came from advertising.
The company’s sales increased by more than 600% as revealed by its IPO filing.
2. A young user base 👶🏽
Snapchat currently has 158 million daily active users. Growth has stalled though because you know, the whole Instagram story thing. Snapchat only grew by 7% between the 2nd and 3rd quarters of 2016.
📈 User Growth is super important to investors, The majority of Snapchat’s audience make up is 18–34 year old, a age range which Facebook has been losing, another reason why Snapchat has been luring advertisers from the mega-giant.
- 25 year olds and younger tend to be visiting the app more than 20 times a day and spending more than 30 minutes a day.
- On average, daily active users visited Snapchat more than 18 times each day and spend 25 to 30 minutes there.
👶🏼 Due to snaps young base, it said their users more likely to jump from one platform to another, they noted that “brand loyalty” or lack there of could be an issue for user retainment.
💦 Seasonality could be an issue to as people used the app less in summer. Another issue is that to use Snapchat it requires high bandwidth capacity, as it’s core function is video.
3. Retaining control 🎮
The companies founders want to remain in control of the company, they are entitled to 10 votes per share, essentially giving them (super) strong control which inevitably takes less power from stakeholders.
If either are fired, they will still have “significant” voting power.
If either die, shares will convert and the other co-founder will be able to exercise voting control over outstanding stock.
4. Many buildings, but no headquarters 🏠
I find this pretty dope, that rather than having a centralised head office, Snap employees are based in different houses spread across the U.S (Venice, California). There are cons however😢:
It could hurt cohesion, morale because employees are more secluded and companies ability to oversee employees is made more difficult (They have 1,859 employees at the end of 2016, up from 600 in 2015).
To add, Snap says they are a kind company *sorta random* but — “When we say ’kind,’ we mean the type of kindness that compels you to let someone know that they have something stuck in their teeth even though it’s a little awkward,” the prospectus says.
5. Moving beyond sexting 😼
When snapchat was introduced in 2011, it was notorious for many things it might not of liked *cough* sexting *cough*. Because messages disappeared once opened it allowed users to be more authentic rather than, you know, pretend everything is perfect *cough* Instagram *cough*.
“When we were just getting started, many people didn’t understand what Snapchat was and said it was just for sexting, even when we knew it was being used for so much more,” the prospectus says.
From just selfies, snap then added an abundance of features:
Lenses:
“Lenses are basically a way to augment your selfies. They are often goofy animations that are overlaid on top of your selfie. ”
Geofilters:
“Geofilters allowing an overlay for the user’s location and for brand advertising.”
They also added publisher stories in January 2015, opening up the feature to organizations with editorial teams.
Spectacles:
Spectacles are essentially glasses with an integrated camera, making it easier to create memories. I tried these on the other day (Thank-you Samuel) and man it was just fun. There’s just something cool about recording from this perspective, it’s closest you feel to going back in time, I wouldn’t be surprised if Snap invested more in hardware, perhaps take on GoPro? Who knows. I’m looking forward to see how this IPO plays out, let the games begin!
Add me on 👻: SamuelGM!
