Snapchat receives $20M from Kleiner Perkins as part of ongoing fund raising

Emerson Dameron
File 32978
The Wall Street Journal reports that Kleiner Perkins Caufield & Byers has agreed to invest $20 million in Snapchat at a nearly $10 billion valuation. This comes after it was reported in late July that Snapchat was negotiating with Chinese Internet giant Alibaba over a potential stake. Those talks later fell through. According to WSJ sources, Kleiner Perkins' investment commitment took place in May and Snapchat’s fundraising efforts are ongoing. Despite the high valuation, the company has yet to see a penny of revenue.
While cynics scratch their heads over how the messaging app company can continue to receive such high valuations without any revenue, Snapchat is rapidly growing up and openly puzzling over how to get itself in the black. The company has filed patents for a money transfer feature and also has been in talks with advertisers over possible paid placements, which are reported to launch this fall. 
Snapchat has also been adding new features like its ‘Our Story’ feature, which collects, curates and strings together Snapchats from a specific geo-location into a streaming story. The company has unveiled the feature twice, at the Electric Daisy Carnival and during the World Cup Final in Rio De Janeiro, Brazil.
Co-founders Evan Spiegel and Bobby Murphy each still own an estimated 25 percent of the company. This new valuation would likely make them both billionaires, at least on paper, and proprietors of one of the most valuable tech startups on the globe.
Snapchat isn’t commenting much on the reported investment and valuation. In an email to the Wall Street Journal a company spokesperson said, “The valuation of our business and our capital requirements are the least exciting aspects of supporting the Snapchat community. We have no further comment at this time.”
While it's a considerable risk for companies like Kleiner Perkins to invest in a highly visible and still-growing company like Snapchat, it may be more than worth it. Investing may bring a waterfall of rewards for those who dared to support Snapchat in its youth, if it becomes 'the next Facebook' or something even more powerful.
On Snapchat, roughly 100 million users a month ping each other with self-destructing photos and text. Between them, 700 million ‘snaps’ and 500 million ‘stories’ are viewed every day.

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