Snapchat Inc. is raising money that could value the company at as much as $19 billion. If completed, the deal would make Snapchat the third-most valuable venture-backed company in the world.
At this time last year, the startup was cooking up a financing round at a $10 billion valuation, after turning down Facebook Inc.'s acquisition offer at more than $3 billion. So how did Snapchat get from $3 billion to $19 billion? It's all about growth.
Here's a chart that shows how quickly the company is growing versus its competitors.
Snapchat was used by 29.4 percent of Apple Inc.'s iPhone users in the U.S. as of Jan. 24, according to 7Park Data Inc., a New York-based company that tracks and analyzes application activity on phones. The company's popularity trumps that of many other buzzy messaging and photo applications in its category, including Kik, Twitter Inc.'s Vine and Yik Yak. It's also inching closer to Facebook's photo-sharing application, Instagram. Instagram has 300 million monthly active users, which is more than Twitter.
Here's a closer look at Snapchat's growth, on both Apple's iOS and Google Inc.'s Android:
Snapchat was launched out of a fraternity in 2011 as an application for friends to send annotated photos -- mostly selfies -- to each other. The photos or videos disappear a few seconds after the recipient views them. Since then, the company has added a slew of new features to entice users, letting them make their own "story" posts for all of their friends to see.
Now, the Los Angeles-based company is getting more serious about its business side, introducing channels for news and entertainment from media companies including Vice and National Geographic. They've also started advertising, with optional-to-view posts that disappear, just like everything else.
A Snapchat representative declined to comment.
Investors are always on the lookout for the next Facebook or Twitter. Snapchat is social media, but its business model doesn't make it the next anything. It's not banking on using demographic data from its users to target ads. Content isn't going viral -- it's being curated into various channels by editors. That makes it harder to value the company. But if you're an investor, you get plenty of numbers -- more detailed than what we're seeing here. And they might add up to $19 billion.