Snapchat has raised $537M of a $650M funding round

The company is said to be raising this funding at a valuation of $16B

Rumors of a big new round from Snapchat have been floating around for months, with speculation that it would be $500 million at a $19 billion valuation.

Now we know that at least one, and probably both, of those numbers were wrong. One is higher than expected, while the other is lower.

Snapchat is raising a round that will top out at $650 million, it was revealed in a filing with the Securities and Exchange Commission on Thursday.

Of that funding, the company has already raised $537.6 million of it, with another $112.4 million left to go.

We already know one investor in the round: Chinese e-commerce giant Alibaba, who put $200 million into the company back in March. At the time, that investment was said to have valued Snapchat at $15 billion; when it closes the current round, it will be valued at $16 billion, according to a report from CNBC. That will make it the third-most valuable venture-backed company in the world, behind only Uber, which is valued at $40 billion, and Xiaomi, which is valued at $45 billion.

VatorNews reached out to Snapchat for comment on the funding, as well as to find out what the company plans to do with the money it is raising, but a company spokesperson would not comment. Snapchat also would not comment on its current valuation.

When all is said and done, Snapchat will be one of those rare companies, like Uber and Lyft, that can say that it has raised over $1 billion.

So what does Snapchat need all this money for? As revealed by CEO Evan Spiegel at Re/code's Code Conference this week, not only is the company growing quickly, it it already looking to exit.

Not only does Snapchat have 100 million daily active users, but it is also showing nearly half as many videos as Facebook already does, meaning it could easily surpass that number pretty soon. Perhaps the funding will go toward expanding the product further; Spiegel did talk about perhaps getting into long-form video.

Spiegel also talked about where he eventually wants to take the company.

“We need to IPO, we have a plan to do that,” he said. “An IPO is really important."

What Snapchat needs to do in the meantime is continue to grow its userbase, which doesn't seem to be a problem, and figure out monetization, which it is currently doing with its nascient ad product. Another $650 million would no doubt help Spiegel get his company where it needs to be.

(Image source: finweb.hnonline.sk)