Snap
Santa Monica, California, United States
Industry: Technology/Social Media
Region: US 🇺🇸
Year Founded: 2011
IPO Date: 02-03-2017
Market Cap: $140 billion
Number of Employees: Approx. 3,000
Revenue: $2.51 billion (2020)
Net Income: -$1.53 billion (2020)
Snap Inc.
Snap IPO
Snap Inc, the parent company of Snapchat, went public on March 2, 2017.
The initial public offering (IPO) was highly anticipated and valued the company at approximately $24 billion.
The IPO marked a significant milestone for Snap Inc, as it allowed the company to raise substantial capital and provided an opportunity for investors to participate in its growth.
Snap IPO Prospectus
A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. You can find Snap’s Prospectus here.
Company Overview & History
Snap Inc is a technology and social media company that was founded in 2011 by Evan Spiegel, Bobby Murphy, and Reggie Brown.
The company is best known for its flagship product, Snapchat, a multimedia messaging app that allows users to send photos and videos that disappear after being viewed.
Snapchat quickly gained popularity, particularly among younger demographics, and introduced various innovative features like Stories, Discover, and Lenses, which enhanced user engagement.
Over the years, Snap Inc has expanded its offerings to include additional products and services such as Snap Map, Snap Spectacles, and augmented reality experiences.
Financial Performance
| Year | Revenue($B) | Net Income($B) | EBITDA($B) | Operational Cash Flow($B) |
|---|---|---|---|---|
| 2017 | 0.825 | -3.445 | -3.128 | -0.819 |
| 2018 | 1.180 | -1.255 | -1.013 | -0.682 |
| 2019 | 1.715 | -1.033 | -0.739 | -0.103 |
| 2020 | 2.506 | -0.945 | -0.720 | 0.062 |
| 2021 | 3.570 | -0.326 | -0.071 | 0.319 |
Business Model
Snap Inc generates revenue primarily through advertising.
The company offers a range of advertising options on its platform, including Snap Ads, Sponsored Lenses, and Sponsored Geofilters.
These advertising formats allow businesses to reach Snapchat’s large and engaged user base with targeted and immersive content.
Snap Inc also generates revenue through its Discover platform, where publishers and media companies can distribute their content to Snapchat users.
Additionally, the company has introduced various e-commerce initiatives, such as in-app shopping, to diversify its revenue streams and capitalize on the growing trend of social commerce.
Market Cap Over the Years
| Year | Market Cap($B) |
|---|---|
| 2017 | 20.56 |
| 2018 | 26.27 |
| 2019 | 34.72 |
| 2020 | 66.67 |
| 2021 | 99.58 |
| 2022 | 128.69 |
Risk Factors
While Snap Inc has achieved substantial growth and success, it faces various risk factors that may impact its future performance.
Intense competition from social media platforms like Facebook, Instagram, and TikTok, which boast larger user bases and greater resources, poses challenges to Snap Inc’s growth and market share.
The company’s success relies heavily on attracting and retaining active users, making user engagement and retention crucial.
Any decline in user engagement or a failure to introduce appealing new features could have adverse effects on Snap Inc’s financial performance.
Snap Inc’s business model heavily depends on advertising revenue.
Therefore, any decrease in advertiser interest or a decline in the effectiveness of Snapchat’s advertising platform can significantly impact the company’s financial results.
Rapid technological advancements present a risk as well, potentially making Snap Inc’s products and services less competitive or outdated.
The company must consistently innovate and adapt to evolving user preferences and industry trends to remain competitive.
Market Opportunity
Snap Inc operates in the rapidly growing social media and digital advertising markets.
The company’s focus on younger demographics and its unique features have helped it capture a significant share of the market.
As of now, Snap Inc continues to explore new opportunities to expand its user base and monetize its platform further.
The increasing adoption of smartphones and the growing popularity of social media present a substantial market opportunity for Snap Inc.
The company has been actively exploring partnerships and collaborations to leverage its platform and reach new audiences, such as through content partnerships with media companies and integration with other apps.
Competitors
- Facebook (including Instagram and WhatsApp)
- TikTok
- YouTube
Key/Fun Company Facts
- Snapchat was initially launched under the name “Picaboo” in 2011, before rebranding as Snapchat in 2012.
- Evan Spiegel, one of the co-founders of Snap Inc, famously turned down a $3 billion acquisition offer from Facebook in 2013.
- Snap Inc’s headquarters, known as the “Snapcampus,” is located in Santa Monica, California, and features various amenities for its employees, including food options, fitness facilities, and creative spaces.
- The company introduced Spectacles, its own line of camera-equipped sunglasses, in 2016, allowing users to capture and share their experiences from a first-person perspective.
- Snap Inc has been actively involved in augmented reality (AR) development, launching various AR features and experiences within the Snapchat app, including AR filters and games.