The messaging company’s latest funding round valued the business at $15 billion (£10 billion). “We need to IPO, we have a plan to do that,” said Evan Spiegel, the company’s 24-year-old co-founder and chief executive at the Code Conference in California this week, reports The Times.
It is the first time that Snapchat has publicly acknowledged its plans to float rather than sell itself to a rival. He did not provide a timescale for the move.
Snapchat is a social networking app that allows its 100 million users to send messages and photos that disappear. It has been accused of encouraging “sexting” by teenagers, who use the platform to send graphic pictures to each other in the knowledge that the photos will be deleted. Vittorio Colao, chief executive of Vodafone, said last week that 75 per cent of UK messaging over its network was over its mobile network.
Snapchat’s rise has been meteoric. It only launched in 2011 as Mr Spiegel and his two co-founders hit upon the idea of disappearing messages while at Stanford University. The fraternity boys originally called the service Picaboo but had little success and a schism in the company led to the departure of one founder — who later sued the company — and a name change to Snapchat. The app came to the attention of Jeremy Liew of Lightspeed Ventures whose daughter said the obscure app was becoming as popular as Angry Birds and Instagram at her school. His 2012 investment in the company implied a valuation of $4.25 million.
It soon came to the attention of Mark Zuckerberg who in 2013 hosted Mr Spiegel and Bob Murphy, Snapchat’s co-founder, at his apartment to tell him that Facebook was about to launch Poke, an app that featured disappearing messages. Poke failed and Mr Zuckerberg returned with a $3 billion cash offer only months later. Mr Spiegel rejected it out of hand even though Snapchat had no revenue or business model.
However it has not been all plain sailing. It attracted the attention of the FTC in 2014 which accused it of misrepresenting its service as “snaps” sent on the network did not “disappear forever” as advertised. It was forced to change its policies as a result.
Worse still, Mr Spiegel was caught up in a sexism row after a host of messages from his days at the Kappa Sigma fraternity were published containing lewd sexual references. He was forced to apologise for the texts and described himself as a “jerk”.