Advertising May Result From $10 Billion Snapchat Investment

Snapchat is expecting a $10 billion investment from VC firm Kleiner Perkins Caufield & Byers. Even though the startup does not have a clear business model, its valuation has increased dramatically from last year’s $2 billion. The investment could help Snapchat advance into the advertising world, a move that is expected this year. Snapchat, which is the third-most used app among millennials, may become a viable platform for generating revenue from the age group through advertising.

SnapchatHigh school and college students have overwhelmingly rejected many other forms of traditional advertising in the past. As Snapchat follows Facebook and Instagram as the third-most popular app among this age group, investors see Snapchat as a good channel to make profits.

Snapchat has also talked with media companies and advertisers about Snapchat Discovery.

“The service would let users read daily editions of publications, video clips and ads by holding down a finger on the screen, like they do with photos and other messages on the app before disappearing,” reports The Wall Street Journal.

“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,” said Mary Ritti, a Snapchat spokeswoman. 

Although Snapchat brings in no revenue, the investment would make the app one of the most valuable private tech startups.