Technology

$SNAP IPO – The Minimum Viable History Of Snapchat

Like many of our clients, Sentieo is gearing up to cover what is likely to be the biggest technology IPO of 2017. We will be doing a series of 5 minute reads, reintroducing potential investors to key parts of the investment story.  If you would like to receive notification when these go out, you know what to do.

Evan explaining the Why of Snapchat with none of the high-production-fluff.

Snap

High Level Takeaways

  • On average, Snap rolls out a major new product once every three months.
  • In the past two years, this product strategy was significantly supported by rolling up adjacent products. This implies acquisitions likely to appear as products soon are Mobile Search and Augmented Reality.
  • The last two years’ $350m acquisition bill is only 70% of its Series D, indicating the company likely had both tremendous ROI on its acquisitions as well as a sizable war chest for more rollups.

A Brief History of Snap: Product, M&A, and Funding

Snap today is a very different company from the Snapchat of 5 years ago, so the relevance of a deep history to the IPO investment case always deserves some reflection. However the culture and strategic direction of a company can be observed in its history, and this is what we focus on to understand the execution ability of the management team.

We are kicking off this series with the first product history on the company curated for IPO investors. As amateur Snap historians we have discovered that the M&A strategy is inextricably linked to the product, and indeed the turnaround times for M&A have been shockingly fast and prescient. And, of course, we then have to include the funding rounds that made the M&A possible. We find the following to be the Minimum Viable History of Snap all investors should know.

Of course, any history involves curation and omission of important factors, and we do aim to flesh out other dimensions of the company in our future pieces. Over the next few posts we will concisely summarize:

  • Snap’s business model and monetization history,
  • the stated goals and strategy of Snap’s management team,
  • consolidated publicly announced numbers on Snapchat with pro forma model,
  • and round it out with a comparison to Snap’s peers and potential future competition.

Stay tuned,

P.S.

Original Sources

Other histories on the interwebs:

Article by Sentieo