LOS ANGELES — Snapchat Inc. is ready to start collecting serious revenue from advertisers, but that doesn’t mean it’s done raising money from investors, too.
Los Angeles’ most famous technology startup has raised $538 million from a collection of 35 investors since mid-February and could raise $112 million more, according to a filing with the Securities and Exchange Commission on Friday.
Shares being sold in the up to $650 million round of funding, if completed, are being priced such that Snapchat is valued at $16 billion, CNBC reported Friday. Snapchat had been seeking a valuation of up to $19 billion when it started fundraising in February. Most recently, a $200 million investment by Chinese online shopping giant Alibaba made in recent months had valued Snapchat at $15 billion.
The new haul brings Snapchat’s total funding to date past $1 billion.
The disclosure comes as Snapchat seeks deals with a wider range of advertisers. Snapchat’s social-media app includes features for its nearly 100 million daily users to share photos, videos and text. Snapchat curates some public postings into special videos that are viewable by users either in the same region or across the world. It’s in those “stories” as well as content from about a dozen media outlets that Snapchat has been including advertising.
Thursday’s advertisers included Warner Bros. Pictures for its new earthquake disaster film “San Andreas” and Maybelline New York. Vertically oriented trailers, about 10 seconds long, for the movie appeared in the National Geographic channel on Snapchat and the short cosmetics ads came inside the Cosmopolitan magazine channel. Snapchat’s distinction from other chat apps is that content is only viewable for a limited amount of time.
New advertising formats or other sources of revenue could materialize in the coming months. But in the meantime, Snapchat is seeking more advertisers and streamlining its existing offerings for them. Generating a steady stream of revenue will be key to delivering investor confidence as Snapchat marches toward a potential initial public offering, perhaps sometime late next year. Snapchat Chief Executive Evan Spiegel said this week at a conference that an IPO was in the cards, but declined to offer a timeline.
New investors in Snapchat include Fidelity Investments, York Capital and Glade Brook Capital, according to CNBC. A spokeswoman for York declined to comment. Glade Brook did not immediately respond. Fidelity declined to comment, but its portfolio disclosures from March show that at least three Fidelity funds have invested in Snapchat.
The funding has helped the startup grow in about four years to 330 employees across several offices, mostly in Venice. A company spokeswoman declined to comment on fundraising.
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