Snap, the company behind popular social app Snapchat, has filed initial public offering (IPO). Snap’s IPO is one of the largest since Alibaba Group went public in 2014, with the company seeking up to $3 billion. Snapchat is one of the fastest growing networks with close to 158 million daily users. Snap, in its IPO filing revealed how Snapchat has prioritised the development of its app for iOS.
The company, in its IPO filing revealed it faces significant competition from the likes of Apple, Facebook (including Instagram and WhatsApp), Google (including YouTube), Twitter, Kakao, LINE, Naver (including Snow), and Tencent. It points out that Instagram, which has Snapchat-like Stories for its platform, mimics its Stories feature. “For example, Instagram, a subsidiary of Facebook, recently introduced a “stories” feature that largely mimics our Stories feature and may be directly competitive,” the filing said.
Snapchat was created in 2012 by Evan Spiegel, who dropped out of Stanford University just three classes shy of graduation to focus on development of the app. Snapchat has undergone several changes since its launch, with the most recent being an overall design revamp and introduction of Group Chat.
The app began as Picaboo, a picture messaging app on iOS in 2011 and was renamed as Snapchat a year later. It made a debut on Android in 2012 and launched videos as well. Stories, smart filters and replay feature were rolled out later. Trophies, Discover, Story explorer, chat stickers, Geofilters, voice and video calling and Memories made their way to the app eventually.
Stories remains one of the most popular and likable features on Snapchat.
According to the company, majority of its user engagement comes from users on iOS. “As a result, although our products work with Android mobile devices, we have prioritised development of our products to operate with iOS operating systems rather than smartphones with Android operating systems,” it said. But the company admits its business and user growth could suffer seriously if it doesn’t prioritise development for Android as well.
Additionally, Snapchat relies heavily on Google Cloud for computing, storage, bandwidth, and other services. And its operations will be negatively affected in case there’s a disruption with their use of the Google Cloud. Snap will invest $5 billion in the cloud service over a period of five years.
Snap launched its first hardware product called Snap in 2016. Spectacles are $130-connected sunglasses that can shoot 10-second video snippets. Snap Inc’s connected Spectacles have a single button to record your snap and it uses a 115-degree wide angle lens to shoot videos, photos. The company looks at Spectacles as an extension of Snapchat and fears adding hardware products to its portfolio will subject the company to additional competition.
Snapchat has come a long way since it was launched in 2012. According to a report, 60 per cent Snapchat users are aged between 13-24 years. If its IPO matches the $30.72-per-share price obtained in its last round of financing, Snap would have a market value of about $30 billion.