Snapchat reportedly turned down a $3 billion offer from Facebook to buy the rapidly growing messaging service. The offer, and refusal, came as the company is being wooed by other investors and potential acquirers. Chinese e-commerce giant Tencent Holdings even offered to lead an investment that would value Snapchat at $4 billion.
However, the two-year-old company’s CEO, 23-year-old Evan Spiegel, likely won’t consider selling Snapchat or allowing an investment until sometime next year. The Wall Street Journal, citing “people briefed on the matter,” explained that Spiegel is hoping the company’s numbers will grow enough to justify a higher valuation.
Snapchat hasn’t generated any revenue yet, but is very popular among teenagers and young adults, who send messages to their friends through it. The latest offer isn’t the first time the social network offered to buy Snapchat, according to the report, which said that the previous offer was for $1 billion.
The latest offer was all-cash and would have valued the service at $3 billion or more. At that price, it would be Facebook’s largest acquisition to date, more than double what it paid for Instagram last year. The move to acquire Snapchat likely comes as users are migrating away from Facebook to the messaging service on their smartphones, where messaging is an important function.
Should Snapchat pursue an investment next year, Spiegel has reportedly already told investigators he would consider selling a block of his own stock.