Snapchat became the most sensational app in just a limited time of two years. Its popularity
with the teenagers and the engagement of the teenagers in the social networking app made it the
most suitable investing ground for the investors worldwide. Snapchat apparently has no source of
generating revenue. It serves as the platform for the teenagers to share the fun of sharing photos
and videos that self-destructs itself within the stipulated time. Still it managed to attract many
investors worldwide like IVP. Snapchat officially announced IVP as their leading investor.
Why IVP invested on Snapchat?
IVP is one of the leading investors of the world who are famed to make only 8 to 12 investments
in a year. Then company generally invests on organizations that generate 20 to 100 million
dollars in a year. Now, the question that inevitably comes up is that why investors like IVP are
interested to invest on Snapchat even when it has not yet started off the monetization engine. The
probable reasons for which Snapchat is becoming popular with investors are as follows:Maybe We Can Arrange A 3 Way
• Mobile platform: The reason why IVP chose to invest on Snap chat is may be because
of the wide popularity of the mobiles and tablets than the PCs. Snapchat becomes the
app of this generation which prefers to replace PCs with mobiles and platforms for
computing. So, it is obvious for a company like IVP to invest on a mobile-based app.
• User engagement: The next USP of Snapchat is probably the statistics of user
engagement. It is surprising to note the momentum it got within a couple of years of its
inception. It gained more engagement than many of the popular social networking sites
which is further increasing day by day.
• Unique concept: This generation of social networking users prefer to snap than to text
and Snapchat provided them a unique platform to snap and text with the feature of self-
destructive Snapchat photos that disappears within a few moments.
• Viral app: The founders of Snapchat came up with the idea of this unique app which has
set the app world of the teenagers on fire.
• Effect of the network: Investors find the ripe grounds of social networking apps worth
of investing as more and more people sign in to it day by day in order to build their
network. The investors know the advantage they can have from this network effect.
Just like other social networking sites, Snapchat never fails to increase its fan base and
investors know the potentiality of that fan base which increases like a chain reaction.
• Big opportunities: investors will surely like to invest in companies with the most
talented base of employees. Snap chat managed to hire some of the most capable young
engineers of the country with the lure of working with the cutting-edge technologies to
initiate something new and unique in the world of mobile apps.
To sum up
Investors prefer to invest on companies with elite entrepreneurs and the company at its hyper-
growth stage. Undoubtedly, Snapchat has managed to obtain this status and eventually became
the Mecca for the investors.