Snapchat raised $175 million in funding from Fidelity Investments, valuing the messaging company at $16 billion, the same as a year ago, The Wall Street Journal (WSJ) reported.
Fidelity, the only fund manager to invest in Snapchat, bought shares in February this year at the same price paid in a March 2015 round. In the interim, it wrote down the value of its Snapchat holding by 25 per cent, without citing its reasoning.
According to the WSJ report, “Snapchat’s inability to raise funds at a higher valuation than a year ago may be a sign investors have grown more cautious about the company’s prospects”.
“Venture investors began tightening their purse strings and pushing back on high valuations last fall amid a volatile stock market,” it added.
But with some other high-tech companies raising money at lower valuations than previous rounds, and with Fidelity’s own reappraisal of Snapchat, the current price has its upsides.
In total, Snapchat has raised more than $1.2 billion in funding from investors like Lightspeed Venture, Yahoo and Alibaba.
Earlier this week, Snapchat CEO Evan Speigel said 8 billion videos a day are watched on the social media app, the same number Facebook touted in November, with views increasing by more than five times from a year ago.
In a presentation to bankers and investors, he said the app has more than 100 million users who are spending an average of 25 to 30 minutes on it each day.