Snapchat and its 23 year-old CEO Evan Spiegel turned down $3 billion in cash to be the property of Facebook, the Wall Street Journal reported. The Los Angeles start up is also being pursued by a slew of other investors, including the Chinese e-commerce company, Tencent Holdings, which is reportedly putting together an offer of $4 billion.
So far, Snapchat's restrain has been prudent. Earlier in the year, it turned down a $1 billion dollar offer from Facebook. It may be seeking a valuation closer to Twitter, at $25 billion after its IPA last week, according to the WSJ.
The company that specializes in the temporary doesn't believe it has hit its peak yet, at least according to Spiegel, and will remain its own entity until the beginning of next year at the earliest, according to the WSJ. Spiegel's banking on Snapchat's usage to increase by then.
Since raising $60 million from investors in June for an $800 million valuation, the service has nearly doubled from 200 million users to today's number of 350 million, the WSJ reported. In total, the company has raised about $73 million in investment funding, according to USA Today. The app's most recent addition was "snapchat stories," which allows users to save one day's worth of snapchats.
Snapchat isn't currently making a profit, though neither was Twitter when it went public. Nor was Pinterest, another image-sharing app similar, when it generated $225 million dollars from investors for a $3.8 billion valuation.
Facebook's interest in Snapchat comes down to the highly lucrative world of mobile advertising. Because most people access the ephemeral messaging service via smart phones, Facebook sees its acquisition as an opportunity to spur ads, according to the WSJ.
