The maker of the Snapchat photo messaging app is considering a fundraising round that would value it at between $3 billion and $4 billion, after rejecting an acquisition approach from Facebook, reports The Wall Street Journal.
Sources said the California-based start-up is looking to raise $200 million but has not yet decided how many shares to offer or how much will come from employees and early investors. The company raised $60 million on an $800 million valuation just a few months ago.
It also believed that Snapchat rejected an approach from Facebook regarding a $1 billion acquisition. This would have been on a par with the social networking giant’s Instagram deal, which has also bolstered Facebook’s position in the image sharing market.
Snapchat differentiates itself by allowing users to share messages that disappear after a few seconds and its user base is generally younger than other services.
Use of Snapchat has grown extensively in recent months. The company said it processed around 350 million messages per day in September, up from 200 million in June. However, the service is yet to make money.
Co-founder and CEO Evan Spiegel has discussed the possibility of introducing advertising to the services and said he hopes to generate revenue ahead of another funding round.
According to the report, Chinese internet player Tencent, and maker of the WeChat mobile messaging app, is a top contender for a stake in Snapchat if the company does complete a new funding round.
Snapchat is not the only player looking to generate funds from the recent surge in messaging apps. Asian messaging app LINE has around 270 million users and has been reported to be considering an IPO.