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Snapchat ends 2014 with $485M in new funding

Snapchat had a pretty good year, one that was filled with major growth, but also some big scandals

Financial trends and news by Steven Loeb
January 2, 2015
Short URL: http://vator.tv/n/3b1e

Despite a number hackings, and just a few scandals, it's fair to say that Snapchat had, for the most part, a pretty good year in 2014. So what better way to cap it off it than to raise a whole lot of new money?

The mobile messaging company has raised $485 million in new funding, according to a filing with the Securities and Exchange Commission, dated December 31st, 2014.

While oo investors were specifically named, it was noted in the filing that a total of 23 investors took part in the round. Rumors of the company's funding round have been around for months, with Yahoo reportedhaving closed its investment in the company in October. Kleiner Perkins Caufield & Byers was supposed to have invested $20 million, with DST Global also participating. 

VatorNews reached out to Snapchat to see if we might be able to find out who some of the investors were, but a company spokesperson would only say, "We will let the filing speak for itself."

Prior to this round, Snapchat had already raised $163 million, most recently a $50 million round in December of last year, which puts its valuation at $2 billion. Investors in the company include Tencent, SV Angel, Lightspeed Venture Partners, Benchmark, General Catalyst Partners, Institutional Venture Partners and Coatue Management.

This round puts its total funding at $648 million.

Snapchat's 2014

This latest round caps off a year where Snapchat proved itself to be a major competitor to the likes of Facebook, the company that had tried to buy it in 2013 for $3 billion. In August Snapchat was said to have100 million active users; now many reports put that number closer to 200 million. 

If you want to see evidence of Snapchat's impact, look no further than the efforts Facebook has made to close it, releasing its own self-destruct messaging app called Slingshot. In fact, Slingshot is actually Facebook's second attempt to capitalize on Snapchat's success, with its previous app, called Poke, having fallen flat.

It was also the year that Snapchat figured out monetization, teaming up with Square to allow users to send money to each other through its text feature. it also launched its first ads in October, putting them in the Recent Updates section and allowing users to not have to look at them if they don't want to.

It's not like 2014 was all sunshine and roses for the company, though. It also found out that being a top social media network isn't all fun and games.

There was the public battle between CEO Evan Spiegel, CTO Robert Murphy and their former frat brother Reggie Brown, who sued the company claiming that he had actually come up with the idea for Snapchat. It was finally settled in September, but no terms were disclosed. 

There were also a bunch of hacking incidents it had to deal with.

First, the company experienced a huge breach on New Year's Eve, which resulted in a total of 4.6 million user names and passwords being leaked, something which the company did not immediately apologize for. In mid-January, Snapchat users were hit with a wave of spam then again in February

Most recently it found itself embroiled in the Sony hacking as Michael Lynton, who is CEO of Sony Entertainment is also a Snapchat board member. Two secret acquisitions were revealed through his hacking e-mail: Vergence Labs, a company that is working on a Google Glass-like device called Epiphany Eyewear, for $15 million, and Scan.me, a QR scanning and iBeacon startup, for $50 million. The leak caused Spiegel to lash out angrily at "people who try to build us up and break us down." 

Much more damaging, though, was a hacking that occurred in October, which resulted in the release of a bunch of naked pictures of a lot of non-famous people. Snapchat was not responsible for the leaking of its images (a third party site took the blame for the incident) but all of these incidents no doubt made some people think twice about trusting Snapchat.

But the worst incident of all for Snapchat was the leaked e-mails from Spiegel from his time in college, in which he referred to women as "bitches" and "sluts." A sample e-mail read, "LUAU FUCKING RAGED. Thanks to all of you. Hope at least six girl [sic] sucked your dicks last night. Cuz that didn’t happen for me.” Signed affectionately, “fuckbitchesgetleid. Spiegel.”

Despite all of its success and milestones, Snapchat's image took such a big hit in 2014, in fact, that the company resorted to hiring a powerful new PR chief in Jill Hazelbak, who had worked as a political consultant for a number of Republican candidates, including New York City Mayor Michael Bloomberg. She also worked as National Communications Director for John McCain’s 2008 presidential campaign. 

(Image source: http://www.usatoday.com) 


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