Snapchat’s Finances Leak — And It’s Ugly

While reports earlier this month indicate that Snapchat is valued at roughly $16 billion, it may not all be peachy keen for the social messaging company. Snapchat’s financials were leaked onto the Web on Wednesday (Aug. 19), and the numbers offer up a snapshot of red ink.

As reported by The Washington Post and originally posted by Gawker, the company lost $128 million through the first 11 months of last year – with a relatively paltry $3 million in top line over the same period. The company, of course, is the very same firm that spurned a Facebook offer to buy Snapchat for $3 billion.

Despite that dismal operating performance, The Post noted, there is still the likelihood that things can turn around for the company (and of course, that it has a relatively better 2015). But in the meantime, despite its valuation, the company is hardly in rarefied territory as the so-called unicorn (tech firms with at least $1 billion valuations) ranks swell.

The $16 billion valuation noted above comes in the wake of $538 million in common stock sold (with an allotment that came in at $650 million), with no details in filings with the Securities and Exchange Commission as to who the buyers or sellers of the common securities actually were. And earlier in the year, no less a powerhouse than Alibaba invested $200 million in Snapchat. Other investors that have put individual investments into the company include Yahoo, and Kleiner Perkins Caulfield & Byers, among others.

And, The Post continued in its discussion of the arena in which Snapchat makes its money (well, at the moment does not make its money), the market for apps themselves has become an increasingly commoditized one. Snapchat’s red ink comes even as firms like Facebook are looking beyond the app realm and even beyond the devices that apps call home, like smartphones. Facebook, for example, has put $2 billion into Oculus, a virtual reality firm.

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