Snapchat founder Evan Spiegel announced his desire to take the $15 billion dollar startup public on Tuesday evening at the Code Conference in California. He told members of the audience that Snapchat “need[s] to IPO...we have a plan to do that.”
Spiegel’s comments follow Facebook’s (FB) previous attempt to acquire the company. In 2013, Snapchat turned down a $3 billion dollar offer from the social media giant. When Walt Mossberg and Kara Swisher interviewed Spiegel at the Conference on why Snapchat is focused on staying independent, Spiegel noted with a laugh that it was “more fun that way.”
Compared to Facebook’s 1.4 billion users and Instagram’s 300 million users, Snapchat’s 100 million users make the service seem relatively sparse. However, Spiegel shared that 65 percent of Snapchat users use the service everyday, sending photos and videos to their friends. That trumps Instagram’s daily usage rate of 25 percent and is on par with Facebook’s.
That high level of engagement has proven to be a lucrative asset for Snapchat, which began partnering with advertisers and media companies such as CNN and Vice, and earlier in 2015 launched a feature called “Discover” that allows users to view bite-sized content from its partners and advertisers.
However, Snapchat doesn’t view ads as the sole anchor of its revenue stream. Spiegel said that “great businesses” have multiple forms of revenue, but declined to elaborate on how Snapchat planned to diversify and expand its opportunities to make money.
Spiegel’s hunger to grow the company and take a hands-on approach has proven to be a double-edged sword for the company. While Snapchat’s aggressive growth and large user base prompted Alibaba (BABA) to recently invest $200 million into the startup, The Wall Street Journal reports that “the CEO’s desire to have a hands-on role with the operation of the company contributed to the departure earlier this year of Emily White, a former Facebook executive who served as Snapchat’s chief operating officer for less than two years.”
Beyond confirming his plans to take Snapchat public, Spiegel also speculated on the existence of a tech bubble. He said that “people are making riskier investments...I think there will be a correction. As for when, we don’t know, but we factor that into our plans. If I knew exactly when, I could make a lot of money.”
Spiegel had previously communicated his position that the tech industry is overdue for a correction in emails obtained by The Wall Street Journal. In 2013, he wrote that “At some point there won’t be any momentum investors left buying at higher prices, and the market begins to tumble. May be 10–20% correction or something more significant, especially in tech stocks."
*** Alex Hantman contributed to this article,
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