Snapchat Reportedly Close To Raising $100 Million With A $500 Million Valuation

Image via Snapchat

Snapchat might be a lot of fun, but is it $500 million fun? Apparently so to at least one investor, who placed the exorbitant valuation on a company that has yet to announce any future monetization strategy. Even so, Snapchat is one of the most wildly popular photo-sharing apps, claiming five million daily users who upload about 150 million photos each day. That kind of usage—more than daily uploads on Instagram for which Facebook paid $1 billion last year—has to amount to some major bucks for someone.

Snapchat allows users to send photos to one another that disappear within a matter of seconds. The app provides a more private photo-viewing experience than Instagram, since users can choose a single friend with who to share a photo, write a message on it and select how many seconds to allow before the photo automatically deletes.

The company raised $13.6 million from Benchmark Capital last year in a previous round of financing, which placed its then-value at about $70 million. In order to further expand the service, Snapchat is reportedly close to raising as much as $100 million and has been fielding funding offers from a variety of Silicon Valley firms, but its founders have settled on a investment from a unnamed non-traditional investor, likely a hedge funder, according Gigaom’s Om Malik.

Based on the new valuation, investors and users are undeterred by recent reports that photos sent via Snapchat don’t always delete from a user’s phone.