Self-deleting photo messaging service Snapchat is reported to be raising another round of funding that would value it at $4 billion. China-based Tencent, which owns messaging apps WeChat and is a major investor in this round. This is Snapchat’s third round of funding and the amount is not disclosed. First and second rounds have been closed at $13.5 million and $80 million respectively.
Snapchat has been growing at a fast pace since its launch in 2011. It has 100 million users and 350 million snaps a day. That is more than triple the 100 daily snaps it had less than a year ago in March.
Furthermore, Snapchat has already started a unique monetization plan for its growing users. It announced the launch of Snapchat stories, a series of snaps developed by a brand to tell a story, in October. (Taco Bell used Snapchat stories to introduce its Beefy Crunch Burrito.)
But Snapchat is looking to do even more, and become more like similar China-based services such as WeChat. co-founder and CEO Evan Speigel says he is excited about in-app purchasing capabilities based on the success of WeChat and QQ (another Chinese messaging and video-chat app). Speigel said that 90% of the revenue of those services comes from in-app purchases.
It looks as if Snapchat is becoming the next communication app with huge marketing potential. If the rumors about this week’s funding turn out to be true, it has already surpassed design brand darling Pinterest, which raised $250 million and was valued at $3.8 billion last week. It still has some catching up to do with Twitter, which has 218 million monthly active users and 500 million daily tweets. Another reason for Snapchat looks likely to succeed: if Tencent was not having success with the Snapchat model in China, it would not be investing in it again.