In the last year, 2016, the Wall Street Journal reported, Snap (the camera and messaging startup) getting ready for an IPO, was preparing a message for the prospective investors in the market: “We’re the next Facebook, not the next Twitter”. This startup is preparing to list on the NYSE (New York Stock Exchange) is looking like a keenly-awaited IPO (Initial Public Offerings) in years. The starting estimates are describing that the $3bn raised can make the company value or worth near about $25bn. All the analysts and investors in the market are picking over the numbers just to detect, whether this list represents good value or not.
This is still a question that will snap earnings blow-up like Facebook or will it work like Twitter and make market disappoint? Both the Facebook and Twitter provide interesting comparisons to investors with the snap. Where, Twitter just reported a bad revenue miss and made losses, on the other hand, Facebook is ongoing to build broad advertising revenues.
As we discussed, the startup has announced that “We’re the next Facebook, not the next Twitter”, but, the numbers are telling a different story. A few days ago, Snap has filed its IPO paperwork publicly with the Securities and Exchange Commission.
Snap does look like Facebook in some aspects. The company completed its last year with 48 percent year-over-year customer growth. This growth rate was approximately equal to the Facebook’s daily audience the year before its IPO, which means the user base of Facebook was three times greater than the size of Snap.
Similarly, the look of Snap S-1 is similar to the Twitter S-1. In both cases, the employees’ number and revenue total are almost same. No one from both is profitable. And, the user base of both companies is limited as compared to Facebook.
Below, you can read the status of these three companies and know how they stack up:
- In 2016, Snap has lost around $514 million and Twitter has lost $79 million the year before its IPO. On the other side, Facebook has gained a profit of $1 billion.
- The revenue of Snap was about $514 million in the last year. Similarly, the revenue of Twitter was $317 million the year before its IPO. And, as you know Facebook is a moneymaking machine, and its revenue was $3.7 billion the year before its IPO.
- As per the studies, Snap has around 158 million active users. Twitter (which only shows monthly active users), has about 218 million. But Facebook defeated both of them with 845 monthly active users rate and 483 million daily active users rate.
- The number of employees in Snap is 1,859, the twitter has 2,000 employees, and it is 3,200 in Facebook.
Do you think the Snap will grow into its Facebook ambitions? Yes, of course. Snap is in the market just for the last five years. And when you go behind, you can see that Facebook didn’t IPO until 8 years, it had come into the market. So, there is no doubt that Snap is handling it on a very short timeline than Facebook.