Guys, Snap Inc. has become a public company! The creators of popular camera app Snapchat filed an Initial Public Offer (IPO) on Thursday. The IPO appears to be one of the biggest IPOs in years. The company seeks up to $3 billion in its IPO; however, that figure could change, based on investor demand, which will in turn shape the price per share. This is great news for the company; of the social media giants, Snap has experienced the fastest growth.
However, compared to Facebook, Snap is just a babe in the woods. Facebook started small in 2004, but has experienced enormous growth, both in its user base and revenue generation, since they went public. While Snapchat is expected to experience a similar growth, due to its increasing user base, it still has to bow to Facebook’s superiority in terms of revenue. Currently, Snapchat has 158 million daily users; that’s a long way, however, from Facebook’s 1.2 billion daily users. This means that Snap still has a long way to go before it can stand on the same level as Facebook.
I’m not saying that they have not tried; after all, Facebook tried to buy the company last year. Whe they failed, they tried to clone Snapchat. That failed too. Finally, they implemented Instagram Stories. So far, that has worked. Furthermore, Snap Inc. set a pretty high bar for themselves with the $30 billion IPO; for a company that lost $1.2 billion so far in spite of its rapid growth, that’s a tall order.
In contrast, Facebook had a net income of $1 billion in 2011, when it went public. This means that Evan Spiegel and Robert Murphy, co-founders of Snap Inc. have to work some pretty neat magic on investors. If they can do that, Snapchat might just be the new boss of social media finance. Heck, it could reach Facebook’s IPO size in three years. Now that would be something worth sharing, won’t it?