Snapchat Inc. has broadly expanded its shareholder base over the last year, going far beyond the few venture capitalists who bankrolled the Venice firm when it was merely an app for sharing self-destructing photos.
Now operating a complex social media app that teenagers can't seem to look away from, Snapchat added close to 120 investors and $1.3 billion in cash to its fold since last May. The figures come from a regulatory filing early Thursday.
Combined with data from previous filings, Snapchat appears to have about 200 distinct investors and has raised more than $2 billion from them.
Many start-up executives squeeze their fundraising activities into a few weeks, often creating a sense of scarcity that allows them to play different investors against each other to get the best price for shares and the least strings attached. It also means entrepreneurs can get back to focusing on running their businesses sooner.
But Snapchat Chief Executive Evan Spiegel keeps the door open, in part because there's intense demand to be a shareholder in Snapchat, which was valued at more than $15 billion a year ago. This week, Techcrunch, citing anonymous sources, reported that some of the more recent investments valued Snapchat at over $17 billion. The batch of U.S. companies finding such outsized interest from investors is small -- ride-hailing apps Uber Technologies Inc. and Lyft Inc. among them.
"If you're a super-hot company, everyone wants to go in," said Mairtini Ni Dhomhnail, a start-up finance expert at Accretive Solutions. "You can raise over many months and give up less of the company because if you keep growing, a dollar today usually buys less shares than it did yesterday."
The latest Snapchat investors are paying high prices for shares, upwards of $30 per share, but they're betting that they will be worth much more when Spiegel takes Snapchat public, as he has said he plans to do.
But less is known about why Spiegel and his chief strategy officer, Imran Khan, are taking money from certain companies and groups.
After launching out of Spiegel's father's house five years ago, Snapchat soon accepted funds from Lightspeed Venture Partners, General Catalyst, Benchmark, SV Angel and Institutional Venture Partners -- established Silicon Valley venture capitalists with a history of backing start-ups like Yelp, Instagram, Airbnb and Shazam.
The elite cadre of tech investors helped Snapchat rope in engineers and designers as it surged into one of the world's most popular smartphone apps.
Since then, Snapchat has turned to mutual and hedge funds and other private-wealth managers for big sums of cash. The group includes Coatue, Rizvi Traverse, Fidelity Investments and Glade Brook Capital Partners. T. Rowe Price joined in recent months, online news outlet TechCrunch reported Thursday.
Snapchat also hit up private companies such as Alibaba.
Other venture capital funds have piled on, including Kleiner Perkins Caufield & Byers, followed by New Enterprise Associates and reportedly Sequoia Capital. And investment groups led by former entrepreneurs, namely HDS Capital and Entree Capital, have nabbed stakes in Snapchat.
TechCrunch named private equity firm General Atlantic and hedge fund Lone Pine Capital as other investors. The venture-capital tracking firm PitchBook says Chilean firm Grupo Arcano, Singapore's sovereign wealth fund and billionaire Len Blavatnik's Access Industries also have positions in Snapchat.
Widening the slate of investors could have political motivations beyond getting capital, said Timothy Lipton, a partner at the investment firm Momentum Partners and an outsourced chief financial officer for several start-ups.
Snapchat may want to limit investors from holding too much power, and attracting many disparate, smaller investors can make it difficult for shareholders to corral a bloc. Companies also sometimes "spread the wealth" to generate goodwill or plant the seeds for relationships among key individuals, he said.
For instance, mutual funds generally dangle more cash than venture capitalists. And providing them early access to shares may increase the odds that they will buy additional shares for long-term holding when a company goes public.
Some investors say they buy into Spiegel's vision that Snapchat represents the future of TV, an on-the-go distribution service for content from both media companies and amateurs.
Snapchat still has a way to go before an initial public offering, given heightened scrutiny from Wall Street over cash flow at tech companies such as Twitter Inc. and LinkedIn Corp. Revenue at Snapchat should reach the low hundreds of millions of dollars this year, mostly from ads that run alongside videos on the apps.
It's a big jump from the mid-tens of millions of dollars last year. But it's far from enough to cover costs, considering the rapid hiring, expensive beachside leases and the computing infrastructure needed to support an estimated 150 million daily users.
Snapchat declined to comment.
The new cash adds to the $538 million Snapchat raised last spring and closes a $1.8-billion Series F round of funding, according to Thursday's filing.
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2:50 p.m.: This story was updated to include comments from Mairtini Ni Dhomhnail, a start-up finance expert at Accretive Solutions, and Timothy Lipton, a partner at the investment firm Momentum Partners.