Snapchat Raises $485.6 Million to Close Out Big Fundraising Year

Snapchat Raises $485.6 Million
People take pictures in front of the Snapchat Inc. headquarters on the strand at Venice Beach in Los Angeles, California. Snapchat, which last year turned down a $3 billion acquisition offer from Facebook Inc., has been developing a business model for advertisers to share disappearing stories. Photographer: Patrick Fallon/Bloomberg

Snapchat Inc., among a pack of elite technology startups that has attained a valuation of $10 billion or more, capped the year with a filing that disclosed it raised $485.6 million.

The Los Angeles-based company, which makes a mobile application for sending annotated photos that disappear within seconds, said in the filing that it raised the money from 23 investors. Snapchat, led by Chief Executive Officer Evan Spiegel, didn’t disclose the investor names or the company’s valuation.

The filing is the first disclosure by Snapchat about its fundraising, which has been in process for months. Bloomberg News reported earlier this year that the startup had been in discussions with Alibaba Group Holding Ltd. to raise money at a $10 billion valuation. While the talks with Alibaba ended, Snapchat has drawn other investors into the fundraising, including Yahoo! Inc. and venture capital firm Kleiner Perkins Caufield & Byers.

Mary Ritti, a Snapchat spokeswoman, didn’t immediately respond to a request for comment.

The filing punctuates how 2014 has been a year of skyrocketing valuations for many closely held technology startups. Numerous companies -- from business software makers to phone app developers -- have been valued at more than $1 billion this year as investors have piled into startups seeking fast growth. This month alone, mobile car-booking company Uber Technologies Inc. revealed it had raised money at a $40 billion valuation, and Chinese smartphone maker Xiaomi Corp. said it had gotten funding at a $46 billion valuation.

Snapchat, which last year turned down a $3 billion acquisition offer from Facebook Inc., has been developing a business model for advertisers to share disappearing stories. Users send more than 700 million disappearing “snaps” a day and more than 500 million stories are viewed daily, the company has said.

Earlier this month, the company named Credit Suisse Group AG’s Imran Khan as chief strategy officer. The company has staffed up elsewhere, hiring Facebook executive Mike Randall to lead its advertising partnerships.

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