Its About To Rain Money On Snapchat

Snap, the enterprise that owns Snapchat, is going to make its financials public in the upcoming days as it prepares to go public. The IPO is set to be one of the most awaited ones in recent history and could end up valuing the company close to $20 Billion dollars.

Snapchat has been a favorite of analysts due to its domination of the 16-34 demographic that is most valuable to advertisers. The app, which invented the category of ephemeral messaging, has grown tremendously from being the unofficial sexting app to being the fastest growing social network in the world.

There were some concerns when Snapchat started to introduce advertising in its app, about how the user experience might be compromised but it has done an excellent job of giving Brands the opportunity to build their featured channels on the app.

We can’t help but think that this is the best time for Snapchat to go public as popular though the app remains, it is under increasing pressure from the likes of Instagram that continue to rip features from Snapchat and serve it to a much larger audience.

Instagram Stories is a direct and blatant ripoff of the hugely popular Snapchat Stories feature that allows users to share moments for 24 hours before disappearing.

There is also come concern about Snapchat being a one trick pony and being solely dependent on one source of revenue to exist. The advertising money will continue to flow in now when the target demographic is still enamored by the app but the same users could flock onto something new much quicker than anyone could anticipate.

Snap Inc also tried its hand at some hardware by introducing the Snapchat glasses that won a lot of praise for being very intuitive to use even if they were not the best quality hardware. A further diversification of the company into more hardware or even other apps cannot be ruled out.

There is no doubt that founders and early backers will make a lot of money in this IPO, but whether investors will be able to reap the same rewards as they have from other technology companies is still very much up in the air.

 

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