Reacting to the news that ephemeral messaging app Snapchat was moving fast toward a $20 million investment from Kleiner Perkins at a $10 billion valuation, Twitter CEO Dick Costolo is defending it – calling it "not absurd."
"Crazy growth, clear monetization path, & one of the best social product thinkers out there," he tweeted.
Snapchat at $10b not absurd. Crazy growth, clear monetization path, & one of the best social product thinkers out there. Long (figuratively)
— dick costolo (@dickc) August 27, 2014
The Wall Street Journal quoted sources familiar with the matter who say that not only is this new round of funding upcoming, but "DST Global, the Russian investment firm led by Yuri Milner, also invested in Snapchat earlier this year at a valuation of $7 billion."
There's no denying that Snapchat may be the fastest-growing social app. It’s also inspired a comically pointless ripoff from a huge international company. It’s also so popular among teens that they aren't sure how to survive without it.
But $10 billion, some have asked For a company with no real revenue?
That "clear monetization strategy" that Costolo refers to isn't really that clear at this point. In-app purchases and traditional advertising both reportedly remain on the table.
We first heard rumors of a new round of funding for Snapchat back in July, when it was reported that a variety of investors, including Alibaba, were looking to give the company the lofty $10 billion valuation.
Image via Snapchat, Twitter