Snapchat turns down $3 billion acquisition offer from Facebook, report claims

By on November 13, 2013, 5:30 PM
facebook, acquisition, messaging, snapchat

Snapchat has reportedly turned down an acquisition offer from social network king Facebook valued at $3 billion or more in cash. The reason for declining the offer is because the Venice, California-based startup is currently being courted by multiple investors according to sources familiar with the matter as reported by the Wall Street Journal.

That’s no small chunk of change as it is three times what Facebook paid for Instagram but at the same time, Snapchat has emerged as one of the world’s most popular messaging apps over mobile. Facebook reportedly bid $1 billion for Snapchat previously, the publication notes.

The service is especially popular among today’s youth that are growing tired of Facebook and those looking to distance themselves from it because their parents now hang out there.

Snapchat hasn’t disclosed the exact size of its user base but at last check, the two-year-old service handles some 350 million messages each day. One estimate claims that roughly nine percent of adult cell phone owners in the US use the app, or in other words, a lot of people.

Snapchat is said to be working a huge round of funding to the tune of around a $4 billion valuation. With that knowledge, Snapchat’s decision to decline Facebook’s offer certainly makes more sense but even still, declining a mega payday after just two years of service would be tough for most – myself included – to do. 

We are told that co-founder and CEO Evan Spiegel likely won’t entertain an acquisition or investment until early next year at the soonest.




User Comments: 15

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1 person liked this | wastedkill said:

Turning down $3billion.... this guy either is a time traveller and knows his app is always gonna be on top or he is simply too stupid to get out before he makes the same mistake myspace did...

JC713 JC713 said:

Facebook will make Snapchat even more creepy than it already is.

1 person liked this | Jamesbrah said:

How does a platform such as Snapchat actually make revenue? I can't imagine they will just place ads in your feed or make you view something before receiving a snapchat..

TheDreams TheDreams said:

Probably gonna try to get google to offer even more and have a kind of secret auction.

1 person liked this | khha4113 khha4113 said:

Turning down $3billion.... this guy either is a time traveller and knows his app is always gonna be on top or he is simply too stupid to get out before he makes the same mistake myspace did...

Founders of MySpace (one of them was Justin Timberlake) didn't make mistake. They sold it to News Corp for almost $600 million. News Corp (personally Rupert Murdoch) was the one made mistake. They later sold it back to MySpace founders for merely $35 million.

Shaun2312 said:

Get a version for Windows phone created please?

1 person liked this | Skidmarksdeluxe Skidmarksdeluxe said:

Snapchat? Never heard of it but I vaguely remember hearing about Facebook once upon a time.

avoidz avoidz said:

Take the money and run. Three billion dollars seems like a whole lot of money to me...

1 person liked this | Arris Arris said:

Had a look at the Android snapchat app in the play store. 3 billion....really? I too would take the money and run.

Forg0t2 said:

Do you even know how much you can do with 3 billion dollars??? I can't!!

EsOhCeeBFD EsOhCeeBFD said:

"Snapchat is said to be working a huge round of funding to the tune of around a $4 billion valuation. With that knowledge, Snapchat?s decision to decline Facebook?s offer certainly makes more sense but even still, declining a mega payday after just two years of service would be tough for most ? myself included ? to do. "

Did nobody read this part? They're trying to get 4 billion in funding. Why would they sell for $1 billion less than the funding they're trying to get? It makes no logical sense to me to sell right now. Like the article said, I think they should hold out until they either get said funding money from investors, or until early next year.

Arris Arris said:

3 billion in your pocket is a lot different to 4 billion "funding". This reminds me of the .com bubble. Anything that looks like it could be the next big thing to suck people in gets money thrown at it.

EsOhCeeBFD EsOhCeeBFD said:

Oh, I'm not saying $3 billion isn't a huge amount to just walk away with, but just imagine how much more they could make the product worth with that extra $4 billion in funding rather than just cashing out now.

Arris Arris said:

I'm probably being short-sighted but I can't see the value in it

1 person liked this | EsOhCeeBFD EsOhCeeBFD said:

Neither can I, but from a business standpoint, it makes perfect sense to me. That's all I was trying to say.

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